The Financial Times recently published an article titled “Coronavirus triggers borrowing spree by private equity managers; Demand surges for bespoke loans to ensure leveraged strategies survive health crisis.” The article discusses reported recent growth in NAV lending, including repeating the narrative that credit is being used in ways that do not foster alignment between fund sponsors and investors.
Richard Wheelahan, Co-Founder and Managing Director at Fund Finance Partners, was recently selected as one of Private Debt Investor’s Rising Stars. Each year, PDI spotlights individuals under 40 who have demonstrated noteworthy leadership and innovation in the private debt industry.
Citibank, Brickfield Recruiting and Cadwalader have posted jobs for experienced fund finance professionals in this week’s FFF.
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Maria "Izzy" Villalba recently joined the Financial Sponsors team at Lloyds Bank as an Associate based in New York, having successfully completed the Rotational Analyst Program.
Facilities for separately managed accounts (“SMAs”) have been on the rise the last few years. Until now, COVID had slowed down the momentum for 2020 (last year, we closed 15 SMA facilities, but through the first half of 2020, we have closed only 5). This was partially due to banks tightening their credit standards. Single investor risk, and particularly risk from certain public pension funds in the 2020 environment, has not been an attractive sell internally. As we enter the fourth quarter, things have started to normalize a bit, and we are seeing a healthy amount of SMA facilities close or mandate with others still in term sheet phase.
In this week’s Fund Finance Friday: Industry Conversations, long-time fund finance banker Charles Newcomb, Managing Director at Signature Bank, joins Mike Mascia and gives his thoughts on current market conditions, his forecasts for the 4th quarter and beyond, and his experience with return to work.
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Fitch has published an Exposure Draft with respect to Private Equity Collateralized Fund Obligations (or “PE CFOs”). PE CFOs are a form of financing for portfolios of private equity funds and generally take the form of a simple securitization whereby different tranches of securities are issued by the owner of the private equity portfolio that provide one or more tranches of rated debt ahead of the equity holders.
The Fund Finance Association’s Diversity and Inclusion Initiative this week hosted an educational and networking event for students in Baruch College’s Financial Leadership Program. Natasha Puri of Lloyds Bank led the presentation to the students, which explained what private equity is, how fund finance contributes to the business interests of the funds, and what a fund finance banker does day-to-day.
Cadwalader’s annual Finance Forum, now in its fifth year, will be held virtually on November 12th. While the Finance Forum’s substance covers a host of finance areas – including real estate, syndicated lending, CLOs, securitization, bank regulatory and financial services litigation – there is always a healthy dose of Fund Finance. As always, there is no charge to participate.
The post-Labor Day acceleration we have come to expect over the past several years has defied COVID and stayed true to form. A terrific volume of new matters have gone under mandate in September; the final numbers look likely to double both July and August. And pipeline metrics forecast a busy closing stretch. So our market continues to be incredibly fortunate and robust. Below are some of our September observations as to transactions and the market generally.