Executive summary

• Despite the COVID-19 pandemic, 2020 still saw robust private equity (PE) activity relative to historical activity, with well over 5,000 completed transactions even amid a drop in aggregate deal value to just over $664 billion. This healthy volume helped drive significant demand for private debt lending to PE portfolio companies.

• Private capital fundraising, especially PE, still saw healthy levels of capital committed even as the tally of closed funds plunged.

• The trend of more experienced and larger fund managers still closing on significantly sized pools of capital also held true for the private debt universe.

• Opportunism characterized trends in fundraising by strategy throughout 2020, with special situations benefiting, along with general debt, as PE fund managers sought bespoke financing solutions for portfolios and private debt players targeted distressed companies.

• Pandemic-driven drawdowns reduced record private debt capital overhang during 2020, but strong fundraising should help replenish.

• Heading into 2021, fund managers will face rising demand from PE firms and other entities given strengthening economic recovery with persisting dislocations, yielding further opportunities for capital deployment.