Private equity | Infrastructure | Private debt Global Investor 30 Campbell Lutyens November 2019 • privatedebtinvestor.com is a global and independent private capital advisor, focused on fund placement and Our inaugural ranking secondary advisory services. of the biggest investors With a global team of more than 150 operating from offices in London, New York, Hong Kong, Singapore, Chicago, Los Angeles and Charlotte, we are celebrating 30 years of delivering results through thoughtful, creative advice and meticulous execution. www.campbell-lutyens.com Member FINRA/SIPC | Authorised and regulated by the Financial Conduct Authority | Licensed and regulated by the Securities and Futures Commission | Licensed by the Monetary Authority of Singapore The Global Guide Understanding to Private Debt Private Debt in Europe A guide to the evolution of the market and investing in the The practitioner’s handbook to asset class navigating the asset class Edited and sponsored by EPIC Private Equity and Edited by EPIC Private Equity, this comprehensive European Capital, this book explores the private debt and detailed guide on the private debt market brings market in Europe, with expert contributions from a together the views and opinions of 19 of the number of market participants. world’s leading practitioners. It will help fund managers: It will help fund managers: • Understand how LPs are constructing private debt • Understand how LPs are navigating this new asset allocations within their portfolios class and constructing an allocation within their • Determine how best to structure the legal, portfolios taxation and financial terms of a private debt fund • Determine how best to structure the key financial • Anticipate which strategies are likely to attract the terms of a private debt fund in Europe most interest from LPs ...plus much more • Learn more about the benefits of different private debt strategies such as unitranche and senior direct lending ...plus much more Available now Available now Order this essential title today Order this essential title today www.privateequityinternational.com/global-guide-to-private-debt/ www.privateequityinternational.com/private-debt-europe Special offer to subscribers: Special offer to subscribers: Order your copy today quoting SUBBK15 and receive a 15% discount Order your copy today quoting SUBBK15 and receive a 15% discount Contents How to contact us Senior Editor Andy Thomson [email protected], +44 20 7566 5435 Senior Special Projects Editor Graeme Kerr [email protected], Global Investor 30 +44 20 3862 7491 Americas Editor Andrew Hedlund ISSN 2051–8439 • NOVEMBER 2019 [email protected], +1 212 633 2906 News Editor John Bakie [email protected], +44 20 7566 5442 Reporter Beyond sponsored lending White Oak Adalla Kim Insight Global Advisors CEO and co-founder [email protected], +852 2153 3874 Andre Hakkak suggests investors take Contributors a wider perspective 18 Victoria Robson, Stephen Schultz, Chin Yuen, 2 Tom Zimmermann Investor stories From San Francisco Managing Editor, Production: Mike Simlett The new frontier Angel Island to Seoul, the last 12 months have seen Head of Production: Greg Russell Capital CEO Dev Gopalan and chief growing interest in private debt from Production Editors: Daniel Blackburn, strategy officer Lynette Vanderwarker global institutions Adam Koppeser explain the appeal of an asset-based Copy Editor: Eric Fish strategy 20 Head of Design: Miriam Vysna The Campbell Lutyens view Senior Senior Designer: Lee Southey secured private direct lending offers Staying in your lien Benefit Street Designers: Denise Berjak, Glen Reynolds compelling solutions to investors looking Partners’ senior portfolio manager Blair Head of Marketing Solutions: to protect returns 4 Beth Piercy Faulstich describes how the firm is [email protected], +44 20 7566 5464 EDITOR’S LETTER More than just an readying its private debt portfolio for a Subscriptions and reprints market downturn 22 [email protected] alternative 7 Customer Service [email protected] Editorial Director: Philip Borel Director, Digital Product Development: Analysis Amanda Janis Director of Research and Analytics: Dan Gunner Head of Investor Research: Nicole Douglas 8 Managing Director, Americas: Colm Gilmore Welcome to the PDI Global Investor 30 Managing Director, Asia: Chris Petersen The 30 largest institutional private debt Group Managing Director, Brands and Markets: Paul McLean investors Chief Executive: Tim McLoughlin The Global Investor 30 in numbers A data snapshot 10 What makes a top 30 investor The methodology behind the The 10 most active investors ranking 12 The top 10 in terms of number of reported commitments provides a very different set ‘Private debt is being used as a fixed of names 24 income replacement’ All the signs point to growth in both fundraising and The Koreans are coming Korean deployment, say Campbell Lutyens head investors are yet to make the GI30 but it could only be a matter of time For subscription information visit of private debt advisory group Richard privatedebtinvestor.com von Gusovius and private debt specialist judging by the growing appetite for Jeffrey Griffiths 13 private debt 28 Investor profiles Where are the Points of view What investors are top 30 investing? 16 saying 32 November 2019 • Global Investor 30 1 Investor stories From San Francisco to Seoul, the last 12 months have seen growing interest in private debt from global institutions DEC 2018 JAN 2019 FEB MAR APR South Korean LPs Need for stable Korea Post seeks global shifting focus to returns driving CIC’s distressed debt fund European private private investments managers credit China Investment Korea Post is seeking two A state-backed Corporation, the global distressed debt fund pension fund world’s second- managers, according to a in South Korea, largest sovereign request for proposals. The the Government wealth fund, is prospective commitment Employees Pension boosting its alternative size is up to $100 million Service, made investments and direct apiece. The capital comes an €80 million investments, according from Korea Post’s savings commitment across to vice-chairman San Francisco pension fund plans fund and insurance fund. two commingled and president Tu $800m for private credit The investor is seeking private debt funds Guangshao, speaking managers with proven managed by at the Asian Financial The San Francisco Employees’ Retirement investment performance Alcentra and BlueBay Forum 2019 in Hong System is planning to deploy $800 in distressed commingled Asset Management. Kong. “If we increase million towards private debt in 2019, with funds, including both pre- According to PDI our exposure to subsequent increases in coming years as and post-GFC. Korea Post data, Alcentra direct investment and the pension fund looks to hit its 10 percent will exclude hedge funds European Direct alternatives, we will portfolio allocation target for the asset class. and special situation- Lending Fund III is create stable returns,” The northern California-based retirement focused funds, although targeting €2 billion. he said, adding that plan anticipates committing dramatically distressed debt funds The BlueBay Direct this is one of the main more to the asset class than in 2018, when it with a partial allocation to Lending Fund III has focuses of CIC in allocated $225 million, according to pension special situations will be a €2.5 billion target. 2019. fund documents. considered. 2 Private Debt Investor • November 2019 Two in three family offices looking to grow private debt allocation Almost two-thirds of family offices and wealth managers are expected to increase their exposure to private debt, according to research. A survey by aviation finance specialist Shearwater Aero Capital found 63 percent of family office and wealth manager institutions intend to invest more in private debt between now and 2021, while 13 percent expect to invest less in the asset class. ACERA creates a dedicated private credit bucket European and Asian investors face costly hidden fees The Alameda County Employees’ Retirement for US debt funds Association, a California-based public pension fund, voted to implement a 4 percent allocation to private Invisible costs for international investors investing in US private debt could credit. The strategy expects an average annual return be eroding returns by as much as 5 percent, according to a report by of 6.7 percent. The plan outlines that ACERA will investment consultancy bfinance. Historically, high taxes have put off many invest $490 million in the strategy by the end of 2022 Asian and European institutions from investing in US debt. However, recent to reach the target allocation of 4 percent by 2023. developments in fund structures have attempted to make US funds more The fund plans to achieve this goal by investing in no appealing internationally. Nevertheless, bfinance has warned that a number less than three core investment managers. of visible and hidden costs cause leakage on returns. MAY JUN JUL AUG SEP PensionDanmark merges POBA seeks five alternatives and private debt teams direct lending fund managers PensionDanmark merged its private debt and alternatives departments to give it The Public Officials greater investment flexibility. The move Benefit Association, a sees its current head of private debt, Kim Seoul-based institutional Nielsen, take over as head of alternatives investor, is looking for following the departure of Claus four private debt fund Lyngdal, who has left to become head of managers that invest in alternatives at Danske Bank after almost mid-market corporates 11 years at the pension fund. in North America and one manager that Dai-ichi Life to launch in-house structured lends to corporates in finance team Asia-Pacific, a source familiar with the matter Japan-based Dai-ichi Life Insurance Company told told PDI. It is understood PDI that its new department, launched on 1 April, is that the Korean investor designed to develop the company’s in-house capability plans to commit $50 for corporate and structured financing. The firm million to each of the announced on 22 February that the team would be fund managers.