There was plenty to talk about at the Fund Finance Association's 8th Annual Asia-Pacific Fund Finance Symposium held in Singapore earlier this week. The buzzwords of the day were NAV, hybrids, CFOs, rated note feeders and SRTs.
Partner Doug Murning joined the panel "NAV-er Say Never: From Niche Product to Core Strategy." NAV and hybrid financings were recurring themes and look set to become increasingly prominent in APAC, particularly against a backdrop of slower fundraising, longer exits and growing continuation and secondary activity.
NAV financing also raises important questions around valuation and information access, particularly when it comes to valuing underlying assets and ensuring lenders have sufficient information to monitor them. Hybrid facilities, bringing together subscription-line and NAV features, may also become a more regular feature of the market.
There was also considerable interest in collateralized fund obligations (CFOs) and rated note feeders. Developments in more mature markets, including the U.S., are generating interest in how these and similar structures might develop more broadly across APAC and facilitate access to a wider pool of institutional capital.
That ties into another developing theme: insurance and institutional capital. SRTs, rated note feeders and other risk-sharing and distribution techniques are creating new ways for insurance and other institutional capital to participate in fund finance. The question for APAC is when, and in what form, these structures may become a more regular feature of the market.
More broadly, the discussions highlighted a growing crossover between fund finance and securitisation. CFOs, rated note feeders, SRTs and other distribution techniques illustrate how structured finance concepts are increasingly becoming part of the fund finance conversation, alongside the growing role of insurance and institutional capital.
APAC may not simply follow the U.S. and UK/Europe step by step, but the vocabulary in Singapore offered a useful indication of where the market may be heading next.
A special thank you to everyone who joined us at our reception at Lantern at the Fullerton Bay Hotel.