Almost all private debt managers expect a wave of industry consolidation within five years, according to new research from Carne Group.
The findings highlight growing pressures from regulation, operational challenges, and shifting deal activity that are reshaping the sector.
The research found that 96% of private debt managers anticipate consolidation over the next five years, with 72% expecting it to be significant. The survey covered 25 senior executives at private credit managers, collectively overseeing $196bn in assets.
“Many managers are still playing catch-up operationally, a dynamic that’s driven consolidation across the industry. As regulation intensifies and talent thins, outsourcing has become a strategic must.”
Des Fullam, Carne Group
Recent moves by large asset managers have underlined this trend. Des Fullam, chief regulatory and client solutions officer at Carne Group, said: “Consolidation is already in swing with recent examples including BlackRock’s acquisition of HPS Investment Partners and Franklin Templeton and Clearlake expanding into the European market through their respective acquisitions of Apera and MV Credit.”
Managers are also recalibrating fundraising strategies, with a slowdown in new deals and re-financings limiting capital deployment. Funds launched five to eight years ago are facing delayed exits, slowing capital recycling and leaving some investors over-allocated or hesitant to re-commit.
Carne’s report found 80% of managers plan to expand into new jurisdictions to raise capital, while almost half (48%) intend to increase outsourcing over the next year. More than 70% cited regulatory pressures as a key factor in outsourcing distribution, and 96% already use artificial intelligence to support investment strategies.
Fullam added: “Many managers are still playing catch-up operationally, a dynamic that’s driven consolidation across the industry. As regulation intensifies and talent thins, outsourcing has become a strategic must.
“Our survey shows reporting and transparency are now the top drivers, followed closely by compliance and staffing challenges. Manual processes won’t cut it; having the right partner brings the tech and regulatory depth necessary to keep managers focused on performance.”
