Chart of the Week: Breakdown of debt fundraising for H1

 More than 50 percent of funds closed in H1 targeted North America   


Data from Private Equity International's fundraising numbers reveal that $22.73 billion – or 11.8 percent of total fundraising – was raised for debt focused strategies in the first half of 2014. This is a 33 percent decrease from the capital collected from 2013's H1 debt funds. 

More than 50 percent of capital raised from debt funds in H1 2014 came with a North American focus. Providence Debt Fund III, Levine Leichtman Capital Partners V and Deerfield Private Design Fund III were the largest three North American funds to close in H1 this year collecting $1.75 billion, $1.65 billion and $1.6 billion respectively.

Europe focused debt funds collected $8.26 billion from 11 funds. Hayfin Direct Lending Fund was the largest fund to close during the first six months of the year raising $2.74 billion. No debt funds that focus in Latin America, Middle East and Africa have closed in the first half of the year.

The level of debt raised for North America may be excessive, and is resulting in poor deals being financed and some good deals being over leveraged, according to Coller Capital's bi-annual survey. Two-thirds of the investor respondents said an over-supply of debt in the North American private equity market.

The same survey indicated that debt levels in European and Asia-Pacific private equity are appropriate.