Fund finance: The 11th Annual Global Fund Finance Symposium in Miami Beach kicked off last night with a well attended welcome reception on the Ocean Lawn at the Fontainebleau Hotel hosted by Carey Olsen and Cadwalader, Wickersham & Taft.
Nearly 900 professionals are expected to attend the main day of events at the conference today. They include a broader swath of the industry than ever before, say veteran attendees – from the mainstay law firms and banks to advisers, and for the first time, according to some, a significant showing from GPs and fund finance investors, including the likes of TPG, Apollo, MassMutual, PGIM and more.
“My outlook going into 2022 is more bullish than in any prior year,” Mike Mascia, chair of the finance practice at Cadwalader, Wickersham & Taft and Fund Finance Association board secretary, told Private Funds CFO.
But 2021 was a bumper year in its own right – Cadwalader alone completed 894 transactions, with $194.02 billion aggregate lending commitments last year in just the US.
NAV lending and ESG are among the hot topics of the day in one-on-one meetings, say attendees. As the NAV market picks up traction, more banks are said to be experiencing some FOMO and actively considering how to expand their offerings.
But the relatively small size of that market compared to subscription credit, which itself is experiencing significant growth, could mean a hard sell to credit committees and bank management. With commitments growing at 30 percent each of the last two years, for some lenders, higher ups might ask why they’d want their fund finance teams diverting their attention away from subscription credit.
A fierce battle for talent is also under way in the market. Law firms are struggling as the overflow of young law graduates in previous years dries up. Banks, for which there are large pay disparities across institutions, are pressed to meet booming business with an already small pool of niche talent.
Pay at some banks is rising to compete with their investment banking peers, and many juniors are pressuring their employers for more rapid advancement – word is some institutions have been known to allow juniors to skip entire levels of seniority, from associate to VP, for example. One bank lender speaking to PFCFO bemoaned the loss of a promising young employee whose ambitions far outpaced experience.
So, too, with non-bank lenders. “It’s incredibly competitive right now,” said one such lender. “If you want talent, you really have to pay for it.”
Today’s speaking events include a fireside chat with Ares’ Mike Arougheti and another in the afternoon with Liar’s Poker and Big Short author Michael Lewis. Panels include topics such as fund finance macro developments, “portfolio finance 2.0” and more.
Haynes & Boone hosted an invitation-only event at Soho House last night, and tonight’s party scene includes hostings by Mayer Brown and Macquarie.
Keep an eye out for our panel coverage and any breaking news later today on our site and in our daily emails!
People: StepStone announced a new class of partners and managing directors yesterday. Jen Banzaca reports.
Email prepared by Graham Bippart