The economic slowdown, coupled with the fact that some of the largest funds had just finished fundraising, led private debt fundraising to slump dramatically in 2020; this marks the first substantial decline for the strategy after a nearly decade-long march higher. As activity slowed in early 2020, portfolio companies drew on revolving credit lines, and in some cases, were offered bridge financing or extended payment schedules from their private lenders.
Direct lending was hit the hardest, as they rely on PE sponsors for a significant amount of deal flow; at the same time, potential investors focused on strategies that tend to do better in bear markets (special sits, distressed).
As a result, most of the other sub-strategies (distressed, RE debt, infra debt, special sits) posted y/y increases in capital commitments.