As I sit here again with one more year in the rearview mirror since the last time we chatted, this older, wiser self has been reflecting on what I would tell my younger self if I had the chance at the beginning of January of yet another year in Fund Finance. Sorry, but I am not going to reveal the actual date of my first year, it was a long, long time ago in a galaxy far, far away with no BlackBerry, let alone an iPhone, no laptops at the bar exam (people still took the bar by handwriting-out their answers with no spell-check (good grief!), no mass sharing of secretaries (each secretary only covered one partner and one associate (not 15 lawyers at a time) and no emailing of documents (each first year quickly became the master of printing massive amounts of redlines and, wait for it, overnighting huge distributions to everyone on the distribution list by knowing each FedEx drop box cut-off time in the city and the last midnight run to the airport to Delta Dash for the final cut in the nick of time). Come to think of it . . .
The Fund Finance Association’s annual symposiums bring together investors, fund managers, bankers and lawyers for education and networking within the fund finance market. The 13th Annual Global Fund Finance Symposium will take place February 26-29, 2024 in Miami Beach.
Investec’s 13th Private Equity Trends 2024 report is out now. The report looks at the outlook for the industry after the toughest year in more than a decade. We polled close to 150 general partners (GPs) to get their views on the current state of the market and future predictions on valuations, fundraising, GP commitments, financing, ESG and more.
Get the latest insights now.
As more subline lenders are beginning to cover asset based lending, banks are keen to create streamlined template documentation with the flexibility to accommodate the borrowing needs of their clients throughout a fund’s lifecycle, as the collateral available for the borrowing base shifts from capital commitments to the underlying investments of the fund. Building flexibility into the standard documentation allows lenders to readily meet a borrowers financing needs during its lifecycle without having to amend the facility agreement and other loan documents. It also allows fund managers to pre-agree template documentation which can be used across multiple affiliated borrowers and multiple asset classes. This approach only works for similarly situated borrowers with straightforward fund structures and would not be appropriate for highly bespoke fund structures or transactions.
Cadwalader partner Leah Edelboim recently spoke with Bloomberg about the NAV market and the increased presence of insurers as lenders to private equity funds that want to borrow against their investments.
Read it here. (subscription needed)
We share some of the key issues for lenders when taking and enforcing security over a limited partner interest in an English limited partnership in Butterworths Journal of International Banking and Financial Law.
Read more here.
The following individuals are on the move in the fund finance industry.
The year 2023 presented the fund finance industry with many challenges that it rose to face with an inventiveness and rigour that showed just how mature and multi-faceted the market has become. At Cadwalader in London we saw almost 25% revenue growth, we grew our team and promoted two of our own to Special Counsel and Counsel (congratulations to George and Tom)!
When we finalise our review of Q4 2023, we expect the number of new money sub-lines across the whole of 2023 to be fairly consistent with 2022 and unsurprisingly, renewals to be aligned to the past year’s performance.
Read more predictions below.
If you made your fundraising forecast in November, it could be due for an update. The Wall Street Journal's December 29 write-up Private Equity Faces Gloomy Fundraising Forecast for 2024 makes my point: The main statistic, Preqin Q1-Q3 global PE fundraising down 46% lower from a year earlier at 620 closings for $509 billion, drives the article’s discussion on the outlook for a prolonged downturn.