Private credit fund managers are increasingly providing investors with customised exposure to the asset class, according to new research carried out by by the Alternative Credit Council, AIMA’s private credit affiliate, and global law firm Dechert LLP.
A new report, In Partnership: Trends in Private Credit Fund Structuring (In Partnership), identifies three key trends that are driving this change: greater investor demand for structures that provide customised exposure to private credit strategies; growing appetite for hybrid and evergreen funds; and; growing appetite of private credit fund managers to raise capital from retail clients.
In Partnership includes exclusive data and insights into how these trends are shaping the expanding $1.5tn private credit market.
Some 80% of surveyed private credit managers report managing capital through a combination of commingled funds and other vehicles. Almost all (95%) of the firms offer managed accounts for single investors, with 69% of all respondents expecting investor demand for co-investment to increase.
The report highlights how private credit fund managers operate funds with a range of liquidity profiles and explores the growing role of hybrid or evergreen fund structures. Some 51% of respondents have funds that offer investors some right to redemption and 48% expect investor demand for liquidity to increase. In Partnership finds that investors seeking ongoing exposure to private credit value how evergreen funds can offer flexibility and support efficient capital raising and deployment.
Leverage is another area where private credit funds are customising their offering, with 41% of respondents including levered and unlevered sleeves and another 12% considering to offer such flexibility for future fundraising.
In Partnership also provides insights into the growing appetite of private credit funds to raise capital from retail investors with two thirds of firms currently, or considering, raising capital from retail clients for upcoming fund offerings, compared to 41% who have retail clients today.
The research draws on survey data from 40 private credit fund managers representing an estimated US$800 billion private credit assets under management and interviews with leading private credit fund managers.
