Strong demand for second fund comes despite falling market share of emerging managers in private debt

  • London-based AshGrove Capital has closed AshGrove Specialty Lending Fund II at its hard cap of $650mn, more than double the size of its predecessor fund.

  • The direct lending fund has secured a 107% re-up rate with existing LPs and raised $325mn in new capital commitments.

  • The fund will look to lend $10–50mn of senior secured debt to European SMEs in B2B software and services. It has already committed 20% of its capital across five investments.

  • AshGrove Capital was founded in 2019 by Ilkka Rantanen, previously a Partner at Metric Capital Partners, Jonathon Ferguson, a Managing Director at Goldman Sachs, and Phil Fretwell, a Managing Director at TPG Sixth Street Partners.

November 12, 2024 (Preqin News) - Emerging managers across private capital have found it more difficult to raise funds as the vehicles raised by the largest and most well-known brands have drawn in a greater share of LP commitments.

As the private debt asset class matures, the proportion of capital raised by emerging managers (GPs that have raised three funds or under) is falling.

According to Preqin data, emerging GPs have closed 57 private debt funds this year, raising $12.8bn. This represents 36.5% of the total private debt funds closed (156) but only 7.6% of the total capital raised ($167.7bn).

In 2023, emerging private debt managers closed 146 funds (38.7% of the total), and raised $40.6bn (17.5%), compared with the wider private debt market, where 377 funds raised a combined $232.0bn.

Across all private markets, emerging managers have closed 923 funds so far this year, representing 36.8% of the total volume (2,510 funds), and raised 14.5% of the total capital raised ($145.9bn out of $1.01tn).

The market dynamic makes AshGrove Capital’s fundraising more impressive. ‘As an independent firm started from scratch just five years ago, doubling our fund size and hitting the hard cap is a huge milestone,’ said Co-Founder and Partner Phil Fretwell.

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