Welcome to a special FFA European Symposium 2024 edition of The Glance. The 8th Annual Global Fund Finance Symposium was held in London with over 1,000 attendees. The market has seen a myriad of ups and downs in the last year, and this Symposium provided valuable insights on how sponsors, borrowers and lenders have faced these challenges, and trends for the future. The market has seen an increase in the securitisation of sublines and the use of insurance money to aid liquidity. We also see first loss and second loss facilities involving both bank and non-bank lenders, as well as an increase in the use of umbrella facilities for evergreen fund structures. There was also a lot of discussion at the Symposium around the increased use of NAV facilities. Professionals from all sides of the industry attended this year’s conference, including our fund finance team. Our summaries of the programs appear below. It was wonderful to see so many of you in London, and a special thank you to those who attended our reception on Thursday evening.

作者: Leon Stephenson Bronwen Jones William Rees Chloe H. Benton Eleanor Jack Harmony Tang Danielle Baxter Dimitrios Pittas Tamari Gvinianidze, Alex Botting, Louisa Martac and Fred Howard

Hot topics in Fund Finance

  • There is a continuing shift in the balance of power towards limited partners, who are more often questioning the use of leverage at the fund level. In particular, limited partners are seeking clarity on the use of NAV facilities outside of the historic use cases in secondaries and credit funds.
  • There is an increased focus for funds to tap-into high-net-worth capital, including through the use of HNW feeders, as a result of a challenging fundraising environment in respect of institutional limited partners. Lenders will increasingly need to consider how to view high-net-worth individuals or feeders from a credit perspective, as these limited partners would historically fall outside of the borrowing base for subscription line facilities.
  • A number of the first wave of sustainability linked loans are now approaching maturity and will need to be refinanced. In light of increased scrutiny of greenwashing, parties are increasingly recalibrating sustainability linked loans and reviewing whether they are fit for purpose.
  • There has been increased consolidation of funds in the past year, which presents challenges for lenders, who are competing with a larger panel of banks to secure lending relationships.
  • There has been an increase in the activity of non-bank lenders in the funds finance market, which has increased liquidity options for funds. A key challenge is that non-bank lenders are typically less able to provide revolving facilities or facilities in a range of currencies, which presents structuring challenges for funds and arrangers. These challenges are less prevalent in the NAV market, where non-bank lenders have also been increasingly willing to provide covenant lite NAV facilities to funds.