The Fund Finance Association hosted a market update webinar on Wednesday with approximately 800 attendees. Led by Nick Mitra of Natixis and organized by Nick and Terry Hatton of MUFG, the webinar included a series of one-minute market updates from industry professionals across the globe and a fund formation data presentation from Dave Lowery at Preqin. Additionally, Jeff Johnston of Wells Fargo gave the closing remarks, which included the announcement of the FFA’s 2020 London and Asia conferences converting to virtual and being scheduled for the week of November 16th (specifics forthcoming).
In this week’s FFF: Industry Conversations, Jeff Nagle, a Cadwalader partner and member of our LIBOR Preparedness Team, teaches a SOFR 101 session. He covers all the high-level things you need to know, including how SOFR is actually calculated, how it differs from LIBOR, what its variations are and which are best, how margins will be impacted, what the expected market conventions are, and what comparable rates exist for non-dollar denominated loans. With the LIBOR phase-out date approaching, the session teaches the basics you need to know to be prepared for moving to SOFR benchmark rates. Additionally, Mack McDonald, CEO of Renaissance West Community Initiative, provides an update on the great work the non-profit is doing to tackle generational poverty with a holistic approach.
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Walkers this week published a thought leadership piece on Alternative Lenders in Fund Finance. The article focuses on the rise of non-bank lenders on the NAV side of the market and highlights their ability to create flexible, bespoke financing solutions, albeit at higher funding costs.
State Street Bank is hiring for multiple Account Officer roles in its Global Credit Finance group, which includes its fund finance business. The senior roles are client-facing with flexibility as to location.
The fund finance markets have normalized materially over the past six weeks or so; the chaos of April is now long in the rear view. While many lenders are wrestling with challenges, they are individual challenges and not systemic: the market as a whole continues to function with relative efficiency. Our markets are incredibility fortunate compared to so many other product areas. Below are my updates on what we have recently observed and what we think is on the fund finance horizon.
In today’s Fund Finance Friday: Industry Conversations, Cadwalader's Samantha Hutchinson hosts Marlborough Partners' Kieran Welsh to discuss the impact of COVID-19 on fund finance products, appetite for asset-backed facilities and the market outlook for H2.
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This week, as part of the Diversity in Fund Finance Group, we connected with PENCIL, the NYC-based non-profit whose mission is to provide New York public school students with access to relationships and opportunities with business professionals. They’ve successfully moved their programs virtual, continuing to support hundreds of students this summer through various programs, including a paid summer internship. Yomi Akinyemi, Director at Wells Fargo, Richard Young, Senior Vice President at Citi, and Natasha Puri, Vice President at Lloyds Bank, joined a Career Panel moderated by Gregg Betheil, President of PENCIL.
Private capital raised in 1H 2020 totaled $438.8 billion, roughly 11% below the 2019 pace on an annualized basis, according to data summarized in PitchBook’s Private Fund Strategies Report Q2 2020. As can be expected in a volatile market, established names fared much better than emerging sponsors at attracting investors, although it’s worth noting that the trend towards greater concentration of capital at top sponsors predates COVID by a couple of years.
In “Subscription Facilities: Variance Rules,” Fund Finance Partners examines the shift in the subscription facility market as a result of COVID-19, emerging trends (including the prevalence of NAV covenants), pricing disparity, and the benefits of umbrella facilities.
This week Private Equity International reported on a recent deal completed by a relatively new challenger bank in the fund finance space, OakNorth Bank: its sub-line facility to customer-focused PE fund, Bluegem Capital Partners.