The private debt secondary market is primed for significant growth during 2024 in terms of both volume and quality of deals as motivated sellers take advantage of the growing pool of buy-side capital, according to a survey by Ely Place Partners.
The advisory firm’s Private Debt Secondary Market Survey 2024, which polled specialist investors for prevailing sentiments on the current state of the private debt secondary market, also reveals that increased competition and fewer concerns about the macro environment are expected to lead to an increase in pricing.
According to the survey, deal volume will increase by 50-100%, with $10-15 billion of closed transactions expected in 2024, with a broad spread of pricing, but competition in particular for high-quality senior loans pushing pricing closer to par.
In addition, the survey suggests that there will be an increase in LP- and GP-led transactions, although LPs will drive the vast majority of deals with pension funds being the largest sellers.
In a statement, Daniel Roddick, Founder of Ely Place Partners, said: “Private debt secondary deals have been growing steadily in size and number over the past twelve months. The establishment of a dedicated buyer universe has given LPs confidence to bring large portfolios to market. At the same time, GPs are proactively taking advantage of the market to accelerate liquidity for their investors.”
