Jan 15, 2021

Private lending funds: growth and challenges

There is no shortage of capital in this world. Real interest rates remain at or close to 0%. Investors continue to struggle to find adequate yield in traditional fixed income investments. Consequently, we have witnessed a dramatic rise in the creation of, and investor interest in, private lending/private debt funds.  Now more than ever, private debt funds and nonbank lenders need state of the art, innovative technology to support their private debt loan administration.   According to a Preqin Quarterly update report on private credit dated Q3 2020, the number of private debt funds in the market has grown to a record high.  As of October 2020, 521 vehicles were on the road seeking $295B in aggregate capital. Additionally, the number of funds in the market has grown consistently over the past five years and aggregate capital targeted has more than doubled since January 2015. (Preqin)