This January, we completed a data project in which we examined every fund finance deal we closed in the United States in both 2017 and 2018. The data set is relatively robust and provides some interesting insights into the market.
We are all accustomed to seeing change of control as a mandatory prepayment event, if not an event of default, under subscription line facilities. Even the strongest sponsors accept that a lender’s analysis of a transaction is based on the current management of the fund, such that any change in control should trigger at least the right to prepayment and cancellation. While there are often points for negotiation, this premise is almost universal.
Alexa Schult, of First Republic Bank, was recently promoted to Senior Credit Analyst. Alexa joined First Republic in 2013 and works with a team that specializes in private equity fund finance. In her expanded role, Alexa will have responsibility for supporting clients and working closely with her team to develop customized credit solutions for private equity fund managers. Alexa is also a founding member of the New York chapter of the Fund Finance Association’s Next Gen Network.
On February 8, realdeals published an article titled “LPs should voice discontent over excessive subscription line usage.” The article is based on, and quotes extensively from, the roundtable discussion in the Triago Quarterly publication, which Fund Finance Friday linked to last week. The subscription-required article can be accessed here.
On February 8, S&P Global reported on Golub Capital BDC 3 Inc. entering into a $175 million financing facility with Signature Bank as administrative agent and lender. The article is available here.
Credit Suisse Seeks Fund Finance Attorney
ING Posts Associate/VP Opening in London
Square 1 Bank Equity Funds Job Posting
Last week Commercial Mortgage Alert released its 2018 league tables for commercial mortgage-backed securities. Cadwalader topped both the issuer and the underwriter tables. Congrats to our colleagues in CMBS! A copy of the article is available here.
Here are some updates to our Fund Finance Calendar.
The Global Investment Performance Standards (“GIPS,” or the “Standards”) published by the CFA Institute (“CFA”) have long been a set of self-regulated guidelines for investment managers, aimed at promoting standardized and ethical investment reporting to investors. The Standards, while voluntary, are immensely popular with both investors and investment managers. According to CFA, 84 of the top 100 asset managers have adopted the Standards and claim compliance for at least part, if not all, of their business. So what does this have to do with subscription finance?
In commercial arrangements under English law, it is vital that the times allowed for a party to perform its obligation are clear. This is especially true in facility/credit agreements and other financial contracts. Lack of clarity results in mismatched expectations between counterparties and uncertainty as to whether counterparties are in compliance with an agreement.