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24 private debt managers achieved 1st quartile returns on 3 funds

A total of 24 managers with private debt strategies have achieved first quartile performance across at least three of their funds launched between 2008-2023, according to new research.

Bloomberg data, analysed by alternative investment research firm The Fund Review, showed Fortress Investment Group was the top-ranking manager with 12 of its 25 debt funds – 48 per cent – achieving first quartile returns.

This put Fortress, which runs corporate credit and asset-backed finance strategies, significantly ahead of the next best performer, Blackstone Inc, which had nine funds achieving top returns, followed by Lone Star Global Acquisitions with eight funds.

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However, some firms had a higher percentage of their total funds achieving these returns. VSS Capital Partners, Taurus Funds Management and Adams Street Partners, for example, saw all three of their funds achieve first quartile returns.

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Average performance for the sector over one year was 9.54 per cent, putting it ahead of the closed-end fund peer group, which returned 8.46 per cent, the research found.

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There was an overall skew towards investments in Europe and loans originated on a direct basis, with an average distribution yield of 9.14 per cent with a wide dispersion.

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The Fund Review added that there is “good representation of top-performing managers with evergreen strategies reflecting the recent fund launches to meet strong investor demand for the attractive yields in a high-interest rate environment”.

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It said that across all asset classes “the evergreen sector contains funds that are run by asset that have consistently delivered top-quartile performance”.