Having gathered our collective breath after a furiously busy 2021 across the US, Europe and Asia (the usual frenetic December deal closing only exacerbated by LIBOR remediation), all signs point to a strong 2022.

Here we share some observations on the year just gone, as well as what in particular we expect in 2022.

February 10, 2022

By Kiel Bowen

Having gathered our collective breath after a furiously busy 2021 across the US, Europe and Asia (the usual frenetic December deal closing only exacerbated by LIBOR remediation), all signs point to a strong 2022.

Here we share some observations on the year just gone, as well as what in particular we expect in 2022.

Fundraising

The fundraising market had a stellar 2021, which fueled both transactional volume and, just as importantly, product innovation.

Global M&A last year reportedly exceeded $5 trillion (boosted by a significantly increased number of PE exits) after a difficult prior period. Preqin reported fundraising at an all-time high, with over $1 trillion raised across the private funds market. That’s not to mention over $3 trillion of investor dry powder awaiting deployment.

Furthering a trend, fewer funds were raised last year than in previous years, meaning that fund size has continued to trend upward—something we have seen echoed in the fund finance arena as sponsors have increasingly demanded larger fund lines and bigger commitments from their relationship banks.

The strength of the fundraising and investment market has fueled confidence in managers. Last year saw several high-profile fund manager mergers and acquisitions (as well as public listings) that have propelled demand for liquidity solutions at the management company level.

The Evolution of Fund Finance

We predict that this year’s buzzword will be “Fund Finance 2.0.” Perhaps more than in any other year for some time, innovation in the...