Private debt

Private debt, what is it?
Private debt is the investment of debt instruments to companies, via direct lending, mezzanine, and or microcredit.
In our report IMPACT REPORT: DEEP DIVE ON PRIVATE DEBT FUNDS we highlight that despite a drop in the number of funds launched in 2020, capital commitments doubled compared to 2019. Next to the insights and analytics provided by our Impact Database, the report also features interviews with practitioners managing Private Debt impact funds: ACTIAM and Tikehau Capital.
Private debt strategies
Private debt can range in size and scale, being implemented in different forms, such as via direct lending, mezzanine, and microcredit.
-
Direct lending: A specialised form of private debt, in which loans are made to middle-market companies. It is the private debt strategy with lower risk, achieved by using collateral.
-
Mezzanine: A specialised form of financing in which loans are subordinated to banks, with no collateral. It is the most equity-like form of private debt.
-
Microcredit: A common form of microfinance, characterised by small loans to individuals or small companies.
According to our Impact Database, private debt funds make up 17 % of the funds tracked by the database with 15 % of the current fundraising.