Last month I joined several of my Cayman colleagues in the bright lights of New York for the Funds Finance Association’s snappily named 6th Annual Global Funds Finance Symposium. And yes – we did remember to pack our thermals!
The Funds Finance Association mainly concentrates on subscription finance – lending against the uncalled commitments of the investors (for more details please see my previous blog. But it also covers other parts of lending to funds. The event was attended by all the major players in the industry, including Harneys, who was one of the sponsors of the event.
Judging by the number of banks and pension companies that were attending for the first time, it looks like the subscription finance market will continue to go from strength to strength. It has certainly come a long way since its infancy and there are now over US$200 billion in global lender commitments. I remember the utter confusion from the lawyers acting on one of the first subscription financings from 2005/06, when they were told that the bank didn’t need to look at the details of the purchase being financed as it would not be taking security over the purchased assets. And that was in the laissez-faire days before the credit crunch.
The pick of the panel discussions was the “General Partner and Management Loans” which covered how banks are lending to managers and GPs. That panel was closely followed by the “Structuring Panel” which our own Matt Taber was a panelist on, and, I am told, was excellent.
Thoughts from the floor on market trends for 2016 were mixed, but a popular view was that the market was swinging away from the larger fund managers and preferring managers with proven track records and transparency. A lot of predictions revolved around the upcoming US elections. As the symposium’s keynote speaker observed, the expression “may you live in interesting times” seems very appropriate with the field of US Presidential candidates.