Ogier published a thought leadership piece this week titled Fund Financing in the Channel Islands; it’s about good financial management. The article sets forth the various types of fund financing that are available to fund borrowers in the Channel Islands. A copy of the article is available here.
PitchBook bullish on fundraising, regulatory focus on disclosure, and a couple of primers.
Jeremy Grubb has assumed leadership of the Private Equity Banking Group at Citizens Bank, N.A. He takes over from Jamie Lewis, who is retiring after 37 years in banking. Jeremy joined Citizens from Bank of America Merrill Lynch in early 2015, and has been involved in fund finance for 13 years.
Here are some updates to our Fund Finance Calendar.
A handful of state pensions and other municipal investors in the United States have been including side letter provisions that prohibit principals or persons employed by a fund sponsor from making campaign contributions to a candidate whose elected position can influence the selection of the fund sponsor for investments. Quite similar to the more widely seen placement agent disclosure provisions, the remedy for a breach is often structured to give the municipal investor the right to cease funding capital contributions without being declared a defaulting investor. Not surprisingly, for a subscription lender, this is problematic.
When the fund finance market began to develop in the UK in the early 2000s, it was not uncommon for standard capital call facilities to include various financial covenants regarding the performance of the underlying assets of the fund, including net asset value and loan-to-value tests. Since then, the fund finance market has rapidly evolved, moving away from the use of these provisions in “pure” capital call facilities in favour of their inclusion in genuine hybrid or asset-backed fund finance deals.
Brickfield Recruitment, an executive search and recruiting firm focused exclusively on the Fund Finance market, announced its formal launch this week. Brickfield intends to match candidates with law firms and financial institutions, covering both banking and legal professionals in Fund Finance. The firm will be headquartered in London. More information about Brickfield is available at www.brickfieldrecruitment.com
Secondary funds are using leverage at record rates, according to a report published by Triago that was highlighted in a recent Secondaries Investor article. Because leverage can smooth the traditional cycle of secondary volume, secondaries utilized leverage in 38% of deals by total transaction value in 2018, up from 23% in 2017. Despite a downturn in public markets at the end of 2018, leverage was a significant factor in secondaries deal volume being at $6.3 billion in January and on pace to smash the $13 billion volume mark set in Q1 2018. Yet some prognosticators have concerns that GP-led deals with substantial leverage could suffer if there were a recession. The full Secondaries Investor article is available by subscription here.
Credit Suisse Seeks Fund Finance Attorney
Here are some updates to our Fund Finance Calendar.