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It is an exciting time to be in the fund finance space. Sponsors continue to seek liquidity to fund investments, and banks and alternative lenders are thinking creatively about how to offer this additional leverage. There isn’t just increased deal-making volume and transactions getting done, but the deals have interesting and novel features which borrow concepts that we see in other types of financing transactions. Among what we are seeing is parties taking a second look at the value of the collateral package and getting comfortable with the idea of putting a second lien on that collateral. It isn’t so long ago that second-lien loans were a form of distressed debt. Then they went mainstream and became a typical form of financing for companies seeking extra leverage while offering the lenders – which range from money center banks to hedge funds and private equity funds and other direct lenders – a nice return on their capital. It only makes sense that, given this concept is prevalent in other types of financings, it would make its way over to the fund finance space.
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The role of the various management/administrative players in a Luxembourg fund structure has become increasingly complicated, so this week Fund Finance Friday took the opportunity to talk with Antoine Fortier Grethen, head of fund finance and partner at SJL Jimenez Lunz, about these roles, how they are relevant to a fund finance transaction and why they may sometimes be overlooked or misunderstood. Antoine is a very experienced fund finance lawyer and also lectures in contract law, business law and finance transactions at the University of Lorraine, so we are very grateful to him for taking the time for this very enlightening discussion.
Women in Fund Finance (WFF) will hold the second part of its “Lead Like a Woman” series on January 27. For more information, click here.
Across the global markets, the countdown to 2022 started many months – or even years – ago. Regulators had announced that the end of 2021 would be the end of nearly all tenors of LIBOR in the $400 trillion global market. This presented multiple challenges, which Cadwalader Financial Services partner Lary Stromfeld, head of the firm's LIBOR Preparedness Team, addresses in related commentary in the Cadwalader Cabinet.
A new Duane Morris article explores how recent alleged fraud incidents in Subscription Credit Facility transactions have caused lenders to question whether current Fund Finance due diligence procedures need an upgrade. To read more on how the authors recommend adapting to the changing landscape of due diligence, click here.
Anastasia Kaup recently joined Fund Finance Partners as a Partner and Managing Director. Immediately prior to joining FFP, Anastasia led the fund finance practice at an AmLaw 100 global law firm, and represented asset managers, sponsor-backed companies and lenders to such entities on all manner of fund financing transactions.
Between Omicron, the holidays, and down-to-the-wire end-of-year closings, it was a hectic finish to 2021. But now that the calendar reads 2022, we wanted to reflect this week on the state of the NAV finance market and provide some thoughts on trends we're observing as 2022 gets underway.
The 11th Annual Global Fund Finance Symposium will take place February 16-18, 2022 at the Fontainebleau Miami Beach. The symposium will bring together investors, fund managers, bankers, and lawyers for education and networking within the fund finance market. Click here to view the agenda. Click here to register.
The Asia and Europe chapters of Women in Fund Finance (WFF) announced this week that the much-anticipated follow-up to Julie Zuraw's May 2021 “Lead Like a Woman” session − “WFF Asia & Europe: Lead Like a Woman, Part II” − will take place on Thursday, January 27. For additional information or to register, click here.
RBS International has recently published an article titled “Fund finance and private equity: a review of 2021.” The article covers developments in private equity financing over the past year as the industry matures while providing insight on flexible core funding, investors' growing focus on ESG issues, the increase in net asset value (NAV) facilities and much more. To review, click here.
In an article titled "Portfolio finance has come of age," Private Funds CFO interviewed preferred equity and NAV lender 17Capital to learn more about the growing impact of NAV loans on the market. Click here to view the subscription-required article.