It’s been well over a year now that we've been harping on about it: Private Debt is IT.
Private Debt Is Booming (per Pitchbook)
Pitchbook just released their Global Private Debt 2023 H1 report and it’s glaring. We’ve compiled a short overview of the report, highlighting key areas of interest for fundraising:
- In the realm of investment strategies, private debt fundraising has gained significant traction, currently ranking second only to private equity (PE).
- During the first half of the year (H1), there was an impressive private debt fundraising of $94.9 billion. This figure not only surpassed the previous year's numbers but also consistently exceeded $200 billion annually for four consecutive years.
- Additionally, there's a noteworthy $16.6 billion raised through retail fundraising channels involving non-traded Business Development Companies (BDCs), interval funds, and tender offer funds.
- These novel structures have empowered private debt sponsors to amass an extra $200 billion in Assets Under Management (AUM) over the last three years. Consequently, the cumulative AUM in the private debt sector now stands at an impressive $1.75 trillion.
- Among various approaches within private debt investment, direct lending remains the top choice for investors, constituting 32% of the total capital raised in the first half of the year.
- Mezzanine financing comes in second at 27.9%, gaining momentum rapidly by increasing its share by 15.8 percentage points within the last year. Mezzanine financing also played a significant role in some of the largest funds.
- Following closely is the special situation funds category, securing the third position. This showcases a diversification in fundraising strategies within the private debt landscape.
This is the year of “We told you so”. The grand reckoning, at last.
So, now that you’re finally convinced to utilise fundraising’s hottest commodity, why don’t you give us a call?
Fuse Capital For Raising Private Debt
Wait, let me do some mind reading… Right now, you’re probably asking yourself: “Why would I give them a call and not go directly to funds on my own?”
And you’re totally right to think that. In fact, It’s the most natural reaction to have. #
You know what else seems natural but really isn’t? Thinking that the earth is flat just because you cannot see the curvature of the earth from your current standpoint.
Elevation is required to distinguish truth. Not all natural perceptions are trustworthy.
…
Still there? Alright, then let’s get to why you should call us for your debt-raising needs:
- Well, first, funds don’t know you. And they trust us. When we send them one of our clients, it means they have passed a vetting process which funds respect.
- Second, you don’t know the ecosystem like we do. What’s the landscape? Which sectors are funds interested in globally? Which fund is interested in the vertical you’re working on? Is a particular fund in a cycle where they would dabble in borrower-friendly deals? Or are they going through a more hard-balling phase? This makes SO MUCH difference. Both in terms of how borrower-friendly terms you can get but also the quantum. And again, because it’s becoming such a hot commodity, a lot of new players are trying to get on the bandwagon now. We know which ones are legit, and which ones are…well, less so. Having a finger on the pulse of the market could increase your final deal reap twofold. (Sometimes less, sometimes more…)
- Third, terms such as warrants & their implications for future fundraising are not as straightforward as one would hope. They are generally misunderstood, if not totally overlooked by non-experts. This can result in one-sided negotiation, bad deals, or just no deal at all. We are here to help you understand those terms and what they mean for the future of your business.
- Fourth, for a relatively small fee (compared to the added value we provide to the Term Sheet), we also help you shoulder the modelling / due diligence & negotiations with funds. This allows you to focus on your primary operations, and keep growing your business without sacrificing much broadband. Let us work our magic so you can keep working yours.
- Fifth but not least, we’re the best at what we do. Just that simple. It’s not really bragging, just a state of affair. It’s not always been the case, and maybe one day someone else will be better than us. But right now, there isn’t really anyone who does what we do as well as we do it.
We have advised a large portion of UK/European venture debt deals over the past 10 years. In the 2-25m ticket, we’re simply the only advisor that adds such value.
We’re only just getting started. As we’re just celebrating our 10th birthday. Now in full swing, we advise ~100+ deals a year. It’s enough for us to remain exclusive enough, and actually help our clients.
And spear-headed by our two co-founders, and 25 (and growing) professionals in 5 countries, we fight until we can provide the best term sheet you can possibly get on the market.
At last, we specialise in businesses “with a story”. In fact, it’s quite uncommon that businesses don’t have “a story”. One of the most critical parts of our job is understanding this story, finding solutions, and communicating with funds from a position of strength.
If you’re worried that you don’t have sticky revenue or no blue-chip client, no long-term contract or are still unprofitable…and you think this could hinder your fundraising efforts.
Fuse Capital can make this work.
Find out how by reaching out to us by filling out the form below.
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