The Fund Finance Association has announced the first edition of its European FFA University Program. The full-day event is scheduled for Thursday, February 4, 2021, from 9 a.m. to 6:30 p.m. London time. Similar to its U.S. counterpart, the European program sessions will be designed for fund sponsor treasury teams, bankers and lawyers looking for an in-depth training opportunity. Registration information, event pricing and the detailed agenda will be forthcoming. Save the date!
The Drawdown has published an interview with Doug Cruikshank, the head of fund financing and Hark Capital at Aberdeen Standard Investments. The Drawdown editor Alice Murray's discussion with Cruikshank highlights the liquidity challenges faced by private equity firms in 2020, focusing in particular on the evolution of the NAV facilities market.
In its most recent "Offshore Business Update," Appleby published an article that looks at the common local law issues that arise in NAV financings and provides a jurisdiction-by-jurisdiction guide covering Bermuda, BVI, Cayman Islands, Guernsey and Jersey.
While most banks offer fund finance options through subscription credit facilities, which are primarily geared toward the earlier stages of a fund’s term, there are now a growing number of lenders offering a different kind of finance option for later in a fund’s life in the form of preferred equity or NAV finance called "portfolio finance."
Cassandra Best of Cadwalader’s fund finance team in New York has been named to the New York Metro Edition of Super Lawyers as a “Rising Star” based on her excellent work for her lender clients, her commitment to diversity and inclusion, and her contributions to the Fund Finance Association’s Next Gen Network.
Congratulations, Cassandra!
In 2019, the U.S. legal cannabis industry generated an estimated $13.2 billion in sales across all medical and adult-use state markets, according to cannabis analytics firm New Frontier Data. Arcview has estimated that cannabis sales are expected to climb to $46.8 billion by 2025. This staggering growth is clearly attractive to many investment funds who are eager to get in on the action and many law firms, including Cadwalader, have active cannabis finance advisory practices. Despite broad investment interest, cannabis remains illegal at the federal level, meaning that many investment funds and banks are hesitant to partake for fear of violating anti-money laundering laws. Reform does appear to be coming: as of November 2020, cannabis is legal in 35 states and in D.C. for medical and/or recreational purposes, while Canada fully legalized marijuana in 2018, and Mexico looks to follow suit. This week, we invited Doug Fischer, General Counsel of Greenlane (NASDAQ: GNLN), (arguably) the first ancillary cannabis business to do an IPO on a major U.S. exchange, to discuss this booming industry and some of the associated risks.
I was able to watch a good number of the sessions at the Fund Finance Association’s Virtual Conference this week and enjoyed the event. Congrats and thanks to Michelle Bolingbroke, the event planning team at Sequence, and the regional chairs and committees on a job well done. I especially enjoyed the session with Ronald Cohen; his thoughts on quantifying and measuring the societal impact of private enterprise were enlightening and worth a watch for anyone who was not able to see the session live. One of the clear themes coming out of the conference is the heavy interest and support for ESG initiatives in both the private equity and fund finance communities. While that is massively positive in its own right, I actually think this industry-wide focus will ultimately be a meaningful growth driver of NAV-oriented lending and related fund-level leverage. Hear me out on this.
In Fund Finance Friday’s 8th May edition, we took a look at the challenges facing the UK and European fund finance market and made some predictions for the future. Now, six months on, we thought it was time for a look at what’s happened in the market since then in terms particularly of pricing and liquidity and to use this opportunity to revisit and, where appropriate, to recast some of those predictions in light of what has actually developed.
This year’s Fund Finance Symposium may have felt a little different from previous years, mainly because there were far less post-networking drinks headaches, but the content was just as insightful and challenging as previous years. As always, the panel discussions were wide-ranging and incredibly enlightening, especially given current circumstances. It’s however safe to say that a few predominate themes surfaced throughout the discussions.
The Cayman Islands Monetary Authority this week issued its long-awaited Statement of Guidance on Non-Fund Arrangements (the "SOG"). The SOG provides guidance on what vehicles can be considered to fall within the categories of non-fund arrangements set out in the Schedule to the Cayman Islands Private Funds Law. Any vehicle that falls within one of these categories is not required to register with CIMA.