‘Exceptionally strong’ demand for private debt assets

private assets private debt real estate infrastructure

21 March 2022
| By Laura Dew |
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There has been “exceptionally strong” appetite for private markets in the last 12 months, as investors seek to diversify their sources of income, according to bfinance.

In market intelligence and market trends analysis over the 12 months to 31 December, 2021, bfinance found investors were tapping into private debt, infrastructure and real estate debt as a way to access alternative sources of income.

New private market manager searches for private debt had increased from 27% in 2020 to 34% in 2021 while real estate had risen from 16% to 25%.

Private debt covered corporate debt, where most capital was deployed, and alternative finance.

“We have seen investors gravitate towards real estate and infrastructure—which, when combined, accounted for 50% of all private market search activity in the 12 months to 31 December 2021—but we have also noticed a marked interest amongst bfinance clients for private debt. Year over year, private debt searches climbed by seven percentage points in 2021, to 34%.

“As inflation has taken hold in developed markets—and proven more tenacious than initially predicted—we have seen real estate recapture investors’ interest, especially more niche categories, such as social housing and life sciences research facilities. Interest in real estate debt has also been significant. The importance of ESG considerations continues to shape these allocations.”

However, private equity interest remained static at 14% while multi-asset private markets fell from 14% to 2% during the year.

Regarding performance, bfinance said private markets had been “robust”, particularly in real estate and infrastructure.

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