Private Debt Funds: The Future of Real Estate Investing?
Private real estate debt funds came to fruition, for the most part, out of the aftermath of the financial crisis. During 2009 & 2010 while the banking industry was in turmoil and failing to lend on real estate, private lenders emerged to fill a void in the market. According to research firm, Preqin, institutional private debt funds raised $110 billion in aggregate capital in 2018 and 41% of the capital raised was secured by direct lending funds. Private debt funds have also proven to be popular with investors. At the end of 2018, 91% of investors surveyed by Preqin felt private debt met or exceeded performance expectations in 2018 and 80% of the investors surveyed expect to invest more capital in private debt in 2019.