Sub-line pros consider which borrowers could suffer in the ‘new normal’: That’s the question I address in the 10th and final installment of my series on subscription credit line/capital call line lending. I asked market participants over the course of my reporting whether certain types or sizes of borrower were having more trouble than others getting the lines they wanted, as well as how and when they wanted them. The answers varied – some said emerging managers, others pointed to funds with assets in troubled industries, but desirable borrowers also met challenges.
You may not agree that there even is a supply/demand imbalance in subscription line lending, as the previous installments of my series on the market suggest. As I say in the main feature (parts 1 and 6, specifically), it’s a highly bespoke, often bilateral market. No one has a representative view of the market and the activity going on in it. But what struck me in the course of reporting was that it was often the lenders who felt there was a supply gap. So I asked them for their thoughts on the question of what challenges might exist and who might face them should fundraising activity pick back up meaningfully but limited supply persists.
I’ll continue to cover the market in the future, as I think there are likely interesting changes ahead for the sub line market. After all, crises tend to act as catalysts for innovation.
Thanks to those who have supplied their thoughts and feedback. If you’d like to give your thoughts, shoot me an email, link below.
Email prepared by Graham Bippart