Dee Dee Sklar, former vice-chair of subscription finance at Wells Fargo, is now a senior advisor for the London-based firm 17Capital.
Private Equity Wire published an article this week titled “New research highlights how fund finance will help GPs combat impact of Covid-19.” The article focuses on a survey completed by Intertrust, discussed at a recent webinar for industry professionals, that looked at how GPs will make use of the tools and options provided by the fund finance market to address liquidity management.
A tip of the cap to our colleagues in the firm’s Financial Services Group, which was named the 2020 International Financial Law Review (IFLR) Americas Financial Services Regulatory Team of the Year.
With markets in uncharted waters, Jeremy Cross from Cadwalader and Jamie Mehmood and Ben James from the Fund Finance Advisory team at Deloitte have gathered together their collective experiences over the last few weeks to provide an overview of the main headwinds in the UK and European Fund Finance market during the current COVID-19 pandemic. Here they examine some of the key themes from both a manager and lender’s perspective, as well as share some thoughts on the future direction of the market.
Dave Philipp of Crestline Investors and Scott Aleali of First Republic Bank connect with Cadwalader’s Mike Mascia in this week’s podcast edition of Fund Finance Friday: Industry Conversations. In the podcast, Dave covers the breadth of the NAV-lending market, including detail about transaction structures and attachment points, addressing revised marks in an existing portfolio, the uptick in borrower inquiries post-COVID, and forecasts for how the NAV and pref equity markets may expand and evolve in the medium and longer-term. Scott gives a credit performance update on the capital call space, discusses the evolving uses of capital call lending in the new environment, and provides a host of insightful predictions for how both the fund finance market and the macro landscapes are likely to play through during the summer and into the future.
Credit agreements often allow private equity funds to join their portfolio companies to fund finance facilities as “qualified borrowers.” In the past, many sponsors did not take advantage of this option, but there has been a marked increase in qualified borrower joinders in recent months. The following is a general overview of the treatment of qualified borrowers in traditional subscription credit facilities (it does not, however, deal with NAV and hybrid facilities, which provide for the pledge of a fund’s underlying assets).
Samantha Hutchinson features in The Lawyer this week, providing some interesting insights and tips for those looking to pursue a career in fund finance.
Secondaries Investor this week published the first of a series of articles titled “Leverage in the time of Covid-19: Fund level facilities.” The article examines how secondaries funds use subscription facilities and fund level leverage, discussing the positive credit performance of subscription facilities, the potential implications if there is a large drop in portfolio value, and the use of NAV lines for early distributions and dividend recaps.
In a Private Funds CFO article, private equity CFOs discuss the ILPA’s draft recommendations for disclosure on funds’ use of subscription facilities. Generally, the private equity CFOs are supportive of such recommendations; however, debate remains around the calculation of two IRRs – one that includes the impact of leverage and one without. A goal for ILPA in providing an IRR without the effect of a subscription facility is to more accurately compare manager performance.
Samir Kaji, Senior Managing Director and Innovation Sector Strategy Lead at First Republic Bank, this week published an article on LinkedIn titled “Use of capital call lines for emerging managers during economic downturns.” The article sets forth the typical uses for which an emerging VC manager might deploy a capital call line and what terms an emerging manager could expect in this environment.