In today’s video version of Fund Finance Friday: Industry Conversations, Tim Hicks, Partner at Cadwalader, provides a market update on the subscription facility sector, and Pramit Sheth, Managing Director at Kroll Bond Rating Agency, gives color on the types of fund finance transactions they are rating and what they are seeing in the market post-COVID. Additionally, Laura Clark, the CEO of the United Way of the Central Carolinas, discusses the tremendous uptick in community needs, what the United Way is doing to try and help our challenged neighbors from both a social justice and COVID response perspective, and how we can all contribute and help. Cadwalader’s Mike Mascia hosts.
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Conyers recently published an article, “The Cayman Islands Private Funds Law: A Pre-Summer Holiday Lender Checklist,” which lists practical lender due diligence items for prospective PF Law compliance and discusses the difference between filing and confirmation of registration.
This week Fund Finance Partners published an update on using management fee lines during the present crisis for working capital, support for GP commitments, and as a source of acquisition finance.
A few FFF editions ago, I described how the appetite for NAV-backed facilities had increased significantly across the private markets in a post-COVID world and how the structures of these facilities were becoming more flexible as they attracted the interest of larger managers, particularly in the primary private equity space. However, whilst facility terms and structures are evolving, the fundamental concept and benchmark underlying these transactions is the “loan to value” ratio. In this piece, I focus on how managers are valuing their portfolios, where there may be a disconnect between the usefulness of the valuation for investors on the one hand and financiers on the other, and where additional protections are being sought by lenders in the market underwriting new NAV-financings.
In today’s video version of Fund Finance Friday: Industry Conversations, Charlie Owens, Managing Director at Signature Bank, gives an update on what the bank is seeing and doing in the market currently; Ken Pierce, newly minted CEO of Lockton Capital Markets, describes the NAV-financing his firm is structuring and placing with insurance company lenders; and Cadwalader’s Sam Hutchinson gives an update on the European market, with a deep dive into the rapidly expanding and evolving NAV-lending space.
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Earlier this week the Institutional Limited Partners Association (ILPA) released follow-on guidance regarding the use of subscription facilities, titled “Enhancing Transparency Around Subscription Lines of Credit.” The guidance primarily focuses on GPs providing enhanced transparency around the outstanding balance of a fund’s subscription facility to enable investors to better forecast the amount of upcoming capital calls and manage their liquidity.
Tune in to Wildgen's Michael Mbayi as he hosts the first session of the newly launched “Fund Finance” webinar series. Panel members include industry leaders George Cherry (Citi Private Bank), Michael Mascia (Cadwalader), Paul Tannenbaum (Mayer Brown) and Olivier Vermeulen (Paul Hastings), focusing on the evolution of Fund Finance during the last decade and liquidity solutions it may provide during the COVID-19 pandemic.
BNP Paribas recently closed a milestone subscription credit facility – notable for implementing an ESG-driven pricing, the size of the facility and for being widely syndicated.
The private equity press covered fund finance extensively this week. Chris Witkowsky of Buyouts published an article titled “GPs ask LPs for more ability to use fund-level leverage to prop older investments.” The article covers fund efforts to inject liquidity into portfolio companies via NAV-oriented borrowing at the fund level.
The Drawdown featured multiple stories on fund finance this week, covering the ILPA Guidance, EQT’s ESG-Linked Subscription Facility, and a historical piece from guest contributor Michael Mbayi of Wildgen.