The fund finance market demonstrated resilience and adaptability in Q2 2024, with several noteworthy trends and developments shaping the landscape.
Fundraising Trends
Fundraising in Q2 2024 showed some resilience but remains muted compared to previous years. The total raised in the first half of the year amounted to $592 billion, a 4% decline from the same period in 2023. However, Q2 closed with $341 billion, slightly ahead of Q2 2023, driven primarily by a handful of mega-funds (five funds over $20 billion).
M&A Activity
Signs of recovery in the M&A space are becoming evident, with private equity now accounting for a larger share of transactions. This uptick is expected to positively impact fund financing and utilization of sub-lines as deal flow increases.
Fund Financing
A notable trend in the fund finance market is the growing adoption of term loans as a cost-effective alternative to traditional revolving credit facilities (RCFs). Term loans are increasingly being incorporated into facility structures, offering GPs more favorable pricing and longer tenors. Meanwhile, RCF pricing has been tightening, with spreads narrowing compared to Q1 in line with other credit markets.
This report delves deeper into these developments and provides a comprehensive analysis of market trends and what to expect in the coming quarters.
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