Over $2.0 billion in direct lending transactions marked 2023 as a “record” year of direct lending activity, as reported by PGIM Private Capital.
According to the private capital arm of PGIM, its direct lending reached a record year of originations at over $2.0 billion across nearly 50 transactions despite a market-wide decline in M&A volumes.
In 2023, investments surged with $10.0 billion in investment-grade assets, $3.1 billion in below-investment-grade ventures, and $503 million in mezzanine and private equity.
$7.4 billion in global corporate finance investments were recorded across North America, the UK, Europe, Latin America and Australasia, shared the firm.
Investors likely to increase private capital allocation
Real assets sectors received $4.7 billion in funding, including energy, power, infrastructure, credit tenant lease financing and structured credit.
Additionally, $503 million was invested in mezzanine ventures, with three new energy platforms initiated.
Market overview: The highs and lows of securities lending
Matt Douglass, senior managing director and head of PGIM Private Capital, commented: “Last year, we saw sustained interest from companies in our private capital solutions. With economic and interest rate uncertainty weighing on sentiment, we saw a distinct trend towards borrowers valuing certainty of execution.
I would expect our origination pace to be strong in 2024. Even though continued economic and geopolitical uncertainty may pressure M&A activity and cause some issuers to defer financing decisions, companies and sponsors will value certainty of execution and trusted partners who can deliver in these market conditions.”
