Josh Binder has joined Mizuho Americas as an Associate on its fund finance team. He will support the bank’s initiative to grow its fund finance business by originating, structuring and executing subscription finance facilities for best-in-class fund managers. Josh most recently served as a Credit Risk Associate at Commonwealth Bank of Australia.
Even though the market practice has shifted away from obtaining investor letters (“Investor Letters”) for many subscription-based credit facilities (“Facility”), Investor Letters continue to be an effective option to provide additional credit support for certain types of Facilities with single managed accounts and challenging lender provisions in side letters. One of the reasons for this change is that Limited Partnership Agreements (“Partnership Agreements”) have become much more lender-friendly, provide more robust secured Facility provisions, and include many of the important Investor Letter provisions. Investor Letters have historically supplemented the standard loan and security documents and fund formation documents to provide direct assurances from a limited partner (“Fund Investor”) to a lender that the Fund Investor unconditionally stands by its capital commitment to a fund (“Fund”). In this article, we will explore a few of the key provisions contained in Investor Letters and the significance of each to a lender in a subscription facility.
Earlier this week Diversity in Fund Finance hosted a virtual event for its Boundary Breakers speaker series. The series is aimed at having open conversations with senior leaders to give voice to the unique issues and perspectives diverse professionals face. The inaugural event featured Vicky Du, Global Head of Fund Finance at Standard Chartered, and was moderated by Albert Tan, Partner and Co-Chair of the Fund Finance Practice Group at Haynes and Boone.
Demand for subscription credit facility lines has significantly increased since the beginning of the COVID-19 pandemic, with the current market estimated at around $500 billion in commitments across over 70 lenders. What are fund investors’ thoughts on the increasing usage of subscription credit lines by managers? PERE surveyed 100 institutional investors to figure out just that in its Investor Perspectives 2021 Study.
The FFA made two announcements this week: The deadline to submit nominations for the FFA’s 2021 awards slate has been extended until next Wednesday. Additionally, the FFA announced it is hosting a Quarterly Update on April 6th at 11a.m. EST, featuring a fund formation update from Preqin and a market update.
Dee Dee Sklar was recognized this week in the March issue of Women Leadership Magazine USA as one of 104 outstanding contributors focused on creating gender equality and empowerment for women in the workplace. While it is great to see Dee Dee receive global business recognition, her relentless advocacy for women is well known to the fund finance community.
The State of New York this week passed legislation intended to help smooth the LIBOR transition for difficult legacy contracts. Law360’s coverage of the legislation and its passing is available here. Congratulations to our Partners, Jeff Nagle and Lary Stromfeld, who have been working on this legislation for well over a year. Great work!
Fund Finance Partners this week published a thought leadership piece on recent developments in the fund finance market. The article is available here.
Last Saturday, Wes Misson was faced with the incredibly sad task of memorializing his mom Judith, who passed away after more than a decade-long battle with Alzheimer's. As is often the case, it was a moment I was proud to get to be one of Wes' friends. He did a wonderful job paying tribute to an amazing woman. Judith was an incredible wife, mother and friend to many. You could feel her love and commitment to family, America, hard work and perseverance in the room.
There has been a dramatic increase in appetite amongst funds for sustainability linked loans (SLLs), which are often commonly referred to as “ESG linked loans” or “KPI loans,” an appetite that is expected to continue to increase in the coming years. This article provides an outline of SLLs, as well as some key structuring considerations.