Performance of Private Credit Funds: A First Look

Wednesday May 9, 2018
  • Working Paper


Although private credit funds have rapidly grown into a standalone asset class over the last decade, little is known about the aggregate performance of these funds. To provide a first look at absolute and relative performance, we utilize the Burgiss database of institutional quality private credit funds. Our analysis evaluates 476 private credit funds with nearly $480 billion in committed capital, including a subset of 155 direct lending funds. We review the recent trends within private credit, provide an overview of various strategies, describe returns since 2004 and compare private credit to several benchmark indices in order to develop a preliminary view of performance and risk across various private credit strategies. Measures of absolute performance reveal IRRs that are positive for the top three quartiles across all sub-strategies. Measures of relative performance (PMEs) suggest that private credit funds have performed about as well, or better than, leveraged-loan, high-yield and BDC indexes.

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Munday, S., Hu, W., True, T., & Zhang, J. (2018). Performance of private credit funds: A first look. (Kenan Institute of Private Enterprise Research Paper). Available at SSRN: