The widespread outbreak of COVID-19 as a global pandemic has rocked the financial sectors and challenged the way we do business. Like many, we view this as a short-term event and believe the long-term outlook for fund finance remains more than promising. Yet it is in these rare times that we find ourselves more closely considering contractual terms to govern uncertainty. We outline here three key topics to address the current disruption: electronic signatures; contractual time limits; and managing potential breaches.
As the black swan event – in the form of COVID-19 – rips through our world and the impacts on health, society and the economy pile up, we offer some thoughts on the current and likely near-term impact on funds and the fund finance market. We do so with full knowledge that it is impossible to predict the future ... but in the hope that this will help to stimulate your own thoughts.
PEI reports that some GPs may move to call capital to pay off outstanding balances on subscription lines to stay ahead of any potential liquidity challenges at LPs.
Private equity holdings have increased in portfolio weight for LPs after the declines in public markets, according to a Wall Street Journal report. Even though portfolios may now appear to be overweight private investments, LPs are mindful of not missing out on potentially attractive entry points.
Trey Burdick has joined Charlotte-based Fund Finance Partners (“FFP”) as an Associate.
Prior to joining FFP, Trey worked in private debt strategy for a $3 billion Charlotte-based alternative asset manager investing in lower middle-market companies across a range of industries.
Here's a look at what we're reading outside the four corners of fund finance.
NAV – or net asset value backed – facilities have been prevalent in the fund finance market for some time now, but we’ve generally seen them used either by secondary fund managers leveraging mature positions or assets which are near-term cash generative (in recent times, on an increasingly more concentrated basis) or by credit fund managers where the underlying assets included in the borrowing base are strictly categorised and pre-set advance rates are agreed depending on the nature of the underlying asset.
For the first time, “Limit Down” and “Limit Up” this week became part of my daily lexicon. And while it would have been harder to have a more eventful week in the macro, we do not have a ton of new developments since last Friday to report for the industry. Our activity levels remained constant this week, somewhat less than the activity burst I have been forecasting the past month as clients press to close deals in progress immediately. We continued to see new prospective deals and mandates flow in at a generally familiar clip, but at neither a heightened or reduced rate.
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Pretika Randhawa has recently joined JPMorgan Chase Bank, N.A. as Executive Director of its Subscription Lending Platform in the Commercial Real Estate group, based in its New York office. Prior to joining JPMorgan, Pretika was a Director with Sumitomo Mitsui Banking Corporation in its Subscription Secured Finance Department. |
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Storey Whalen has recently joined the growing Private Equity Finance team at First Republic as a Director based in New York. Storey joins Scott Aleali, Jeff Maier, and Alexa Schult to grow the First Republic Private Equity Finance portfolio, with a particular focus on capital call facilities, management company lending, and GP financing, as well as being a holistic retail banking partner for private equity principals. |
Appleby has published an article revisiting highlights and identifying key takeaways from last month's Global Fund Finance Symposium.