A Survey of Private Debt Funds

IF 1.9 Q2 BUSINESS, FINANCE

Review of Corporate Finance Studies Pub Date : 2024-02-17 DOI:10.1093/rcfs/cfae001

Joern Block, Young Soo Jang, Steven N Kaplan, Anna Schulze

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Abstract

Despite its large and increasing size in the United States and Europe, the private debt (PD) market, compared to the bank and syndicated loan markets, has been researched little. In this paper, we survey U.S. and European investors with private debt assets under management (AuM) of over $390 billion. These investors are primarily direct lending funds. We ask the general partners (GPs) how they source, select, and evaluate deals; how they think of private debt relative to bank and syndicated loan financing; how they monitor their investments; how they interact with private equity (PE) sponsors; and how they view the future of the market. Respondents provide primarily cash-flow-based loans and believe that they finance companies and leverage levels that banks would not fund. Direct lending funds target unlevered returns that appear high relative to their risk. They use leverage in their funds, but appreciably less than banks and collateralized loan obligation funds (CLOs). They use and negotiate for both financial and negative covenants to monitor their investments. The presence of PE sponsors helps them lend more and craft more effective covenants. U.S. and European funds are similar along many dimensions, but European funds rely less on PE sponsors and compete more with banks. Overall, the private debt market is both different from and shares characteristics with bank loan and syndicated loan markets. (JEL G23, G30, G32)

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私募债务基金调查

尽管美国和欧洲的私人债务（PD）市场规模庞大且不断扩大，但与银行和银团贷款市场相比，对其研究甚少。在本文中，我们调查了美国和欧洲的投资者，他们管理的私人债务资产（AuM）超过 3900 亿美元。这些投资者主要是直接借贷基金。我们询问了普通合伙人（GPs）如何寻找、选择和评估交易；相对于银行和银团贷款融资，他们如何看待私募债务；他们如何监控投资；他们如何与私募股权（PE）发起人互动；以及他们如何看待市场的未来。受访者主要提供基于现金流的贷款，并认为他们为银行不会资助的公司和杠杆水平提供融资。直接借贷基金以无杠杆回报为目标，相对于其风险而言，这种回报似乎较高。他们在基金中使用杠杆，但明显低于银行和抵押贷款义务基金（CLO）。它们使用财务和负面契约并就其进行谈判，以监督其投资。PE 发起人的存在有助于他们提供更多贷款和制定更有效的契约。美国和欧洲的基金在许多方面都很相似，但欧洲的基金对私募股权基金发起人的依赖较少，与银行的竞争更激烈。总体而言，私募债务市场与银行贷款和银团贷款市场既有区别，又有共同特点。(JEL G23, G30, G32)

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来源期刊

Review of Corporate Finance Studies BUSINESS, FINANCE-

CiteScore

17.80

自引率

1.80%

发文量

期刊介绍： The Review of Corporate Finance Studies (RCFS) is dedicated to publishing high-quality research in the expansive field of Corporate Finance. The journal seeks original contributions, reviewing papers based on their unique insights into Corporate Finance. This encompasses a wide spectrum, including a firm's interactions with stakeholders, capital markets, internal organization structure, compensation mechanisms, corporate governance, and capital management. RCFS also welcomes research in financial intermediation, financial institutions, microstructure, and the implications of asset pricing for Corporate Finance. The journal considers theoretical, empirical, and experimental papers for review.