Citywire - Private credit funds resilient but the 'jury still out'
- lguagliardo
- Aug 18, 2022
- 1 min read
December 12, 2020
In an update to their 2018 paper, Performance of Private Credit Funds, Shawn Munday of the Institute for Private Capital at UNC Kenan-Flagler and his colleagues examined the performance of private credit funds through Q2 2020. Using Burgiss data, they found that the performance of private credit funds has held up through the coronavirus pandemic, but the jury is still out on how the strategies will behave over a prolonged credit cycle. A few highlights from their new research shows that:
Across all funds, the most recent vintages of 2018 delivered an internal rate of return (IRR) of 7%. Among these, generalist and direct lending funds, excluding mezzanine, had the highest pooled IRR, achieving 9.3% and 9.2% respectively
Out of all the vintages, the funds that started investing in 2008 had the highest pooled IRR, with 12.5% overall
Public market equivalents (PMEs) using the leveraged loan index suggest private credit has generally provided superior performance
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