Twenty-seven private debt funds reached a final close in the third quarter, raising an aggregate $19.3 billion in commitments, according to research by Preqin, the alternatives data provider.
This was an increase from $17.8 billion raised in the second quarter by the same number of funds.
The direct lending strategy class accounted for both the largest amount of capital raised in the July-to-September period, $9 billion, and the highest numbers of funds closed, 11.
“The private debt industry continues to flourish in North America and Europe, once again supported by strong direct lending fundraising figures,” Preqin’s head of private debt products, Ryan Flanders, said in a statement.
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“Closing the most funds and raising the greatest amount of capital, direct lending is driving a profitable private debt industry whose funds in market are seeking an aggregate $117 billion.”
Preqin said direct lending was likely to remain private debt investors’ most sought-after strategy, with 68% of LPs polled targeting direct lending over the coming year.
North America saw the highest number of funds closed during the third quarter, with 14 funds securing an aggregate $7.9 billion.
However, Europe-focused funds secured more capital than North America-focused ones, $10.3 billion raised in capital commitments. Preqin said this was the result of the two largest funds to close having a focus on Europe.