News from Ely Place

In March 2024, Ely Place surveyed most of the specialist credit secondaries investors to get a sense of where the market might be heading in 2024 and beyond. Key findings include:

An increase in volume of up to 100%. Although a large number of unreported, bilateral deals make estimating the true size of the market difficult, respondents estimated that $6-10bn of deals were closed over the last 12 months. Dealflow of more than $30bn was expected for 2024, with $10-15bn of closed transactions. One investor believes that by 2026 the market will be $50bn annually.

Pricing has picked up between 2 and 5% as a percentage of NAV on a year ago, with high-quality senior loan portfolios trading at close to par. Overall, the middle of the range is mid to high 80s as other portfolios continue to trade at larger discounts depending on a range of factors including the stage in the fund term, expected refinancings, the underlying strategy, the quality of loans, leverage, and the GP.

GP- and LP-led deals will increase, but with LPs gaining confidence that the growing buyer universe will support fair pricing that segment of the market is expected to account for as much as 80% of all transactions. GP-led deals are also expected to grow in number as managers look to wrap up older funds and accelerate liquidity for their LPs.

Other themes expected include an increase in the quality and size of deals, sellers being more open to structured solutions to reach price expectations, and manager consolidation acting as a tailwind for the credit secondaries market.

You can read the full report here: https://elyplacepartners.com/wp-content/uploads/2024/04/Ely-Place-Private-Debt-Secondary-Market-Survey-2024.pdf