2022 European Market Predictions – Finance and Banking

Marion Steward

Looking back, 2021 started at 100 mph and the pace seemed to get
faster with each passing week and month. Like many fund finance
teams in the industry, the Cadwalader London Fund Finance team
experienced its busiest year by every measure and grew accordingly
with a promotion to special counsel (congratulations Mathan!) and
several recruits of incredible talent into the team. The team
advised on financings totalling in excess of €50 billion in
commitments across all fund finance products, of which
approximately €27 billion were new financings and €23
billion were rebookings (being tenor extensions or commitment
increases on existing deals). 

In 2021 we continued to see an accelerated development of fund
finance products, particularly in the European NAV market,
subscription facilities grew in size and number reflecting positive
fund raising trends and LIBOR remediation had the market (and us!)
working around the clock.

And now as we look ahead to 2022, we anticipate further
development of the NAV market reflecting the increasingly complex
finance structures that emerged during 2021 as more GPs realise the
value they are able to unlock by tapping that part of their capital
structure. We also expect to see a further uptick in subscription
facilities, including some of the largest and most widely
syndicated facilities the European fund finance market has seen,
and increased GP/Co-invest facility attention from sponsors as they
work to find liquidity solutions for their co-invest

We also look ahead two weeks to the Global Fund Finance
Symposium, the first in-person industry conference since the
pandemic began. To help get the conversations started, for this
edition of Fund Finance Friday we have asked
some of the major industry participants in Europe across bank and
non-bank lenders, debt advisers and sponsors for their view of
where the market is heading in 2022. 

We have had a great response to our call for predictions again
this year and are very grateful to those who are returning to offer
their thoughts for a second year and those who are braving a
crystal ball gaze for the first time!  Thank you all for your
time and insight. We look forward to thanking you in person very
soon as we all emerge from our work-from-home arrangements and
return to the office. 

And as it’s Friday, feel free to have a sip of your beverage
of choice each time you read “ESG” and two sips if you
read “NAV”.

Shelley Morrison, abrdn: “Due to
the continued growth in fund size and demand for fund finance
facilities, 2022 will see increased requirement for banks to
transfer/syndicate risk in order to manage counterparty limits or
balance sheet constraints. We expect that most risk transfer will
continue to be achieved through syndication on a deal-by-deal
basis, albeit a growing number of lenders will be looking at
structured portfolio solutions. As a consequence of this
accelerating risk transfer, the presence of non-bank lenders in
fund level transactions will become more common. In the European
market, ESG or sustainability-linked finance will finally move into
the mainstream in 2022 following a more general market movement
towards cleaner and greener finance. We predict a material increase
in the number of transactions papered where performance against a
range of ESG-related KPIs impacts the loan margin or fees paid on
credit facility. Norms or standards for market practice and
documentation will begin to cement, which should in turn reinforce
the ESG trend.”

Shani Unantenne, ANZ Banking Group:
“We expect the demand for fund financing to continue the
growth trajectory seen over the last 12 months into 2022. The
challenge for the market is going to be how to continue to support
this demand. There’ll be continued pressure on banks to expand
teams (with resultant competition for talent) and ensure
availability of balance sheet. Banks are likely to continue to
review internal product/clients caps and expand teams further. This
will open up greater opportunities for non-bank lenders, and we
expect to see greater partnerships between banks and non-bank
lenders going forward. With the sub line market increasingly well
served by a larger number of banks and resultant competition for
this business, we expect banks to also continue to expand and
extend their product offering, which will be well received by
sponsors who are also likely to make even greater use of the
broader set of products available in the market. ESG will continue
to be a theme across the market. Overall, expect a very buoyant and
busy 2022 for everyone, particularly with (hopefully) the worst of
the COVID challenges now behind us.”

Eli Appelbaum, Ares Management
: “The fund finance market continues
to evolve as a tool utilized by both managers and investors. We
expect 2022 to be another active year in the capital markets for
fund finance transactions, including syndicated collateralized fund
obligations. We also expect ample opportunity for investors, like
Ares, to provide capital solutions that are tailored to the
particular objectives of a manager or LP and more flexible than
traditional bank capital. Growth opportunities also exist as fund
finance continues to expand beyond private equity into sectors such
as real estate, credit and infrastructure that often demand
flexible capital and specialized resources.”

Sarah Lobbardi, Avardi Partners:
“The growth experienced in 2021 is continuing at the beginning
of 2022, with strong fundraising activity across all asset classes
boosting demand for capital call facilities in Europe. We expect to
see an increased volume of NAV financing, particularly in the
secondary and private equity space where managers seek enhanced
returns and additional liquidity. Non-bank lenders are expected to
gain market share in the fund finance market and work with
traditional bank lenders to cope with the high demand from fund

Nick Armstrong, Bank of Ireland:
“Discussions around bank capacity constraints for sublines
will be a feature of the next 12 months; I expect to see a
significant move towards wider use of institutional capital in the
market towards the end of the year. The impending approach of Basel
IV is going to impact European lenders in particular and how they
assess the credit risk of subline transactions, and, perhaps more
significantly, how much capital they are required to hold against
these assets. Discussions around capital relief solutions
(including the use of non-bank capital in transactions) will
intensify. Expect a clash with sponsors around disclosure if one of
the answers to this problem is public ratings.”

Sabih Hussain, Barings:
“Following a record year for us in fund finance, we believe
2022 will be another busy year. We have found that all the lenders
returned in 2021 and market terms have stabilised.”

Tom Glover, BC Partners: “If 2021
was a breakthrough year for GP acceptance of concentrated NAV
financing tools, 2022 will be the year of more widespread product
adoption along with continued product evolution. We see a growing
group of mainstream GPs looking to employ concentrated NAV to drive
value growth in their mid- and late-life funds. 2022 is likely also
to be the year in which substantially more GPs embrace innovative,
non-dilutive debt and preferred equity financing structures to
exploit strategic opportunities and drive powerful value creation
at the GP level.”

Guillaume Hartog, 
BNP Paribas: “2021 was another
record year for the subscription finance market despite the
continued challenges due to the COVID crisis; this demonstrates the
robustness of this market and its quick recovery. We expect the
market to continue growing in 2022, with bigger funds and larger
facilities, as well as a stronger focus on ESG from larger asset
managers. Pricing has now stabilised, and we expect it to remain in
line with 2021. In terms of funding type, we expect the full
security package to remain the norm, with greater interest in NAV
facilities from PE funds (being a mature technology for Fund of
Funds) and preferred equity financing. Sub lines should continue to
represent the bulk of the market, with more uncertainty for hybrid
facilities. We also feel more institutional investors and insurance
companies will enter the market, in the secondary market in

Guillaume Ferrer, CACIB: “2021
has been another exceptional year for the private equity market
both in terms of fund raising and deal activity. Naturally, the
Fund Finance market followed the same trend, and there is no signs
of it stopping: several megafunds are announced for this year and
record amounts of capital to be deployed. Even with newcomers to
the market, this situation could put some pressure on the financing
offer as banks’ balance sheets are not growing as fast as funds
demand. While pure subscription lines should continue to constitute
the majority of new financings, we see an increased demand for more
sophisticated and tailored structures. Besides, now largely
widespread ESG-linked loans will continue to grow, moving from a
nice-to-have to a must-have feature. CACIB Fund Financing Team
believes 2022 will be an active and exciting year.”

Michael Peterson and Shiraz Allidina, Citco Capital
Solutions Inc
: “After a very active 2021, we
continue to see strong forward demand from clients across all
alternative asset classes. We expect innovation in fund finance
will continue as both investment managers and fund investors
continue to seek new structures to meet their evolving needs.
Specifically, we expect innovation of hybrid and NAV facilities to
continue at a rapid pace. Lastly, we also expect to see continued
demand for bespoke secondary trades.”

George Cherry and Billal Malik, Citi:
“We believe the EMEA fund finance market will continue to grow
in line with the expansion of Private Market capital, and it
appears likely that 2022 will prove to be a record year for
European fundraising. In light of this, and the overall increase in
average fund sizes, we anticipate broader syndication of facilities
and increasing participation by non-bank lenders in the year ahead.
ESG-linked facilities will also be a feature of many new deals,
with lenders and sponsors building on several precedents closed in
2021. We also expect to see higher numbers of continuation funds
being launched as sponsors and investors become increasingly
comfortable with them as an alternative to end-of-fund asset

Richard Braham, Eunice Zhou and Joel Buckett,
Commonwealth Bank of Australia
: “In the European
subscription finance market, we have seen a large increase in the
volume and structural complexity of transactions over the past
year, partially driven by increasingly complex investor needs and
jurisdictional requirements. 2021 also saw record M&A activity
leading to market consolidation, with some of the largest sponsors
entering into a broader range of strategies and closing their
largest funds to date. Given that funds are now sitting on a record
US$3trn of dry powder, 2022 could be set to top 2021 in terms of
fund investment activity, and this will inevitably drive a high
demand for fund financing. The increasing diversification of
investors entering the market will continue to necessitate growth
of known, tested fund financing structures and also more innovative
fund structures, leading to a greater variation in facility types
(Umbrellas and SMAs as examples). We also expect to continue to see
an increase in ESG-linked facilities following the accelerated
trend in 2021, and funds will continue to develop robust governance
frameworks to meet their ESG requirements.”

Amit Mahajan, Crestline: “Last
year was an exciting and productive year for the Crestline Fund
Liquidity Solutions team. While COVID was threatening the growth
trajectory of countless industries, our team was creating unique
financing solutions to help companies weather one of the most
severe market dislocations in recent history. As a result of our
team’s deep expertise and knowledge of the NAV lending space,
we were able to successfully provide companies with the liquidity
they needed to combat near-term challenges and focus on the
long-term success of the organization. Through our fund liquidity
solutions platform, we were able to provide financing to mature
funds as well as specific portfolio companies (in conjunction with
a fund NAV guarantee from other portfolio companies). As our
strategy continued to develop, we found that our NAV financing was
particularly well received by real assets and infrastructure funds,
an area we’ll be exploring more going into 2022. As we make our
way through the new year, we expect to see continued demand for NAV
financings stemming from the same themes in 2021. We also plan to
continue expanding our financing offerings to include new target
markets such as GP management companies. Overall, we do not see
this momentum slowing and expect higher deal volumes in 2022 for
the whole industry.”

Jamie Mehmood, Deloitte: “The two
longer-term trends that we flagged at the start of 2021 continue to
be as relevant today as they were then: an increase in ESG-linked
lending – very much now moving to become the norm rather than
the exception – and increased direct activity in fund finance
from institutional liquidity. A further consideration for 2022 is
the potential for broader liquidity pressures as the year
progresses, given the anticipated strong fundraising pipeline and
large but relatively finite liquidity supporting the market. We
also expect there to be continued innovation from lenders looking
to differentiate themselves, in particular around structured
lending, as has increasingly been the case following the influx of
innovative liquidity into this part of the fund finance market over
the past 18-24 months.”

James Nash, Deutsche Bank: “This
will be an extremely interesting year for Private Capital markets.
As expected, the market took off in 2021 with records being set for
numbers and values of deals executed. This was built on record
levels of dry powder, pent-up demand for deals, firms adjusting to
working flexibly and the continued search for yield from investors
globally. There’s no sign of this momentum slipping away as we
head into 2022, but there are some potential headwinds to contend
with: rising inflation, proposed tax reforms in the U.S., COVID-19
outbreaks flaring up, global supply chain weaknesses, geopolitical
issues and, perhaps most importantly, increased competition for a
finite numbers of assets. These opportunities and threats carry
across to the fund finance market as well. I expect the mega
managers to continue raising record-sized funds with investors
backing their abilities. To counter this, other managers may look
to more innovative structures and will also be pushing to lock in
opportunities early. This points to another exceptional year of
volumes for the fund finance industry across both NAV and Sub Line
lending. However, the push to lock in opportunities earlier and
outbid multiple competitors further heightens the need for strong
due diligence on the structures, documentation, LPs and,
importantly, the managers themselves. Outside fund finance, I
expect discussions around GP finance will continue to build across
the market as managers need to finance their growing commitments,
and I expect continued strong demand for LP financing, especially
from HNW individuals and family offices.”

Jack Dutton and Nick Parkhouse, Ernst &
: “We expect to see a significant increase
in the level of portfolio company exits by private equity funds, as
they look to realise fund value. With this return of capital to
underlying investors, we expect to see a continued wave of
liquidity coming into PE funds, albeit we have seen more recent
raises primarily directed towards the larger ‘mega’ funds.
This may have a knock-on impact to the capital raising of UK
mid-market funds. As a result, we could see ever larger capital
call facilities, concentrated with the more established managers.
In addition, returns may come under pressure as competition for
underlying portfolio assets remains extremely high, driven by
excess liquidity in the market, making asset level leverage not
only more appealing but likely necessary to meet the return
expectations of underlying LPs.”

Josh Bourone, Ganryu Capital: “We
expect the demand for sophisticated fund finance solutions to
increase in line with the launch of sophisticated investor and
product solutions by managers. Lenders will invest more into their
fund finance platforms to serve the future needs of their
borrowers. The secular trends of private markets are an opportunity
for many lenders but also a risk for others.”

Todd Hooper, Goldman Sachs: “2021
was robust from a risk perspective across all of our fund finance
solutions globally. We saw a significant increase in our top-tier
sponsor clients exploring and adopting NAV facilities. Along with
the growth of private markets more generally, fund financing and
specifically NAV facilities is an area we expect to grow
exponentially this year as GPs and LPs have become more familiar
with these structures and the benefits they can provide to each. As
a result of COVID and general market dislocation, we initially saw
GPs look to use NAV facilities as a way to support underlying
portfolio companies from a liquidity perspective. More recently we
have seen them primarily used to fund accretive add-ons or new
investments, or to fund a distribution in order to enable recycling
of capital commitments. LPs are playing more of an active role in
the market with many participating alongside bank lenders. Given
the increasing size of funds raised and thus larger facilities, we
believe syndication will be a big focus for 2022.”

Steve Burton, ICG: “Sounding like
a cracked record … but continued growth as all Sponsors want to
have and use facilities, so bigger facilities for BIG funds, many
with ESG – well, we need to usefully employ all these new ESG
experts on something – will be the order of the day. Get your
cheque books and your pencils sharp, banks. Greater adoption of NAV
facilities will be seen as such facilities become more familiar to
all stakeholders. What would I like to see? More commercial and
pragmatic credit departments and sensible, timely KYC – is
this REALLY too much to ask? Apparently, yes. We really need to
drive simpler documentation, processes and thereby reduce costs as
we all should by now understand the risks in this sector. We are a
maturing industry. Time to grow up.”

Ian Taylor, ING: “In the absence
of any economic shocks, we see continued growth for subscription
finance in the European market. Particular themes include the
widespread adoption of ESG-linked structures and the expansion of
club and syndicated facilities to meet the liquidity requirements
of ever larger funds. NAV lending will continue to feature as more
institutions consider this within their fund finance product range.
As loan portfolios and product offerings expand to meet sponsor
demand, lenders may face hiring challenges for experienced fund
finance professionals and ambitious junior talent.”

James Rock-Perring, Intertrust:
“As expected, Private Markets have shown continued growth and
resilience through the difficult last 12-18 months, and 2022 looks
to be a strong year for fund managers. Increasing liquidity from
traditional and institutional lenders continues in the subscription
line market, and in the NAV space, managers have become
increasingly comfortable using leverage against NAV in their
portfolios for various purposes. More demand for financing and
increased liquidity has definitely fuelled the need for the
‘outsourcing’ of competitive processes to secure market
terms, benchmark and seek out liquidity in an efficient and focused
way. From my experiences, I have seen first-hand the positive
reaction of managers to the benefits of this role and, from the
lenders’ perspective, am very pleased to see how they have
embraced the presence of an intermediary in a very
relationship-driven and collegiate way.”

Helen Griffiths and Alan Macdonald,
: “Institutional capital is on
everyone’s must-have list. We expect more of this liquidity
option to be channelled into value accretive NAV and GP solutions,
making the role of the arranger with skin in the game a competitive
proposition. We expect the institutionalisation of the mid-market
to allow GP stake activity to expand into the European market in
2022, opening up solutions previously reserved for large cap
sponsors to fund platform expansions and enable founders to
monetise their interests. Continuation fund financing for both
multi- and single-asset portfolios will continue to be a growing
trend and a viable alternative to more commonly seen NAV and pref

Jill Wilson and Scott Turner, Lloyds
: “We see the 2022 key market themes as: (1)
increased demand for ESG ‘technology’, particularly in
sub-lines, as managers look to embed ESG into the debt structures
to align with their house goals and LP expectations; (2) innovation
around the use of fund collateral (both UCC and assets) to help
drive value for investors; and (3) increasing non-bank
institutional demand for the asset class, particularly around
higher yielding products. We expect demand to remain strong with
the best GPs continuing to raise capital for proven strategies as
investors seek to lock in access to the next economic cycle across
the risk spectrum. The structured segments of the market, including
equity wrapped, hybrid and pure NAV structures, will continue to
see increased demand as GPs explore ways to maximise the potential
of collateral to augment investment returns while lowering the
overall cost of capital, and we predict good growth in this part of
the market as GP demand for innovation is matched by a growing
number of lenders who can now deliver deals of this nature. Despite
the low relative risk, lenders will need to balance innovation with
risk and ensure focus is on the right deals and maintaining
discipline around the risk/reward mix as competition increases.
Investor flight to quality is still highly relevant as investors
look to commit with the right managers with strong track records
underpinned by world-class teams, access to the best deal flow, and
the ability to operate diversified platforms at scale. In the same
vein, lenders, both banks and non-bank, will continue to target
opportunities with the strongest managers and, as such, we believe
the supply side will remain liquid for the best, most sought-after

Steve Berry and Roger Fox, Macquarie Asset
: “We expect to see continued strong
growth in the fund finance market, driven by the largest and most
successful managers a) deploying capital quickly, b) raising
significantly larger funds in each vintage, and c) acquiring or
developing adjacent strategies as they grow and diversify their
proposition to investors. Each trend is increasing the frequency
and total size of facility raises for leading managers. We expect
to see significant related opportunities for lenders as managers
grow and diversify their lender group, in order to ensure adequate
liquidity and fill fund financing needs. This will drive a
continuation of the trend of institutional investors being
increasingly impactful within the sector as borrowers seek more
flexible capital outside of the capacity of their existing banking

Dadong Yan, MassMutual: “In
recent years, fund finance has grown and innovated beyond even the
most optimistic expectations. In the coming year, we expect its
evolution will reach new heights and solidify its place as an
alternative asset class. This is an increasingly competitive
market. Alternative lenders have to differentiate themselves
through creative structuring and a nuanced understanding for each
specific underlying asset class or strategy. Forward-thinking GPs
will naturally seek alternative lenders with a strong track record
of providing customized holistic solutions. It’s evident that
the ability for one single alternative lender to lead deal
structuring while simultaneously speaking for the entire
transaction is the key differentiator to offering GPs a seamless
bilateral experience.”

Russell Evans, Steve Elliott and Kieran Welsh,
National Australia Bank
: “As a team, we’re
expecting 2022 to set another new high-water mark in private
capital fundraising which will continue to drive strong demand for
fund financing solutions. We’re anticipating the strongest
growth in new launches from funds focused on infrastructure,
renewable energy and energy transition, where the incorporation of
ESG-linked KPIs will become market standard in fund finance
facilities. We’re also expecting an increasing number of mega
funds seeking ever larger and more flexible liquidity solutions
which will challenge traditional lenders and structures whilst
opening up the market for alternative ‘non-bank’ lenders to
participate.  We’re also expecting the lasting impact of
COVID to leave some GPs holding on to assets for longer periods,
which will potentially drive a step up in continuation fund
launches and a potential increase in demand for NAV and hybrid
solutions. Finally, we’re looking forward to some long overdue
face-to-face meetings, lunches and conferences whilst hopefully
spending less time on Zoom.”

Amira Hajili and Hamid Aguerbal,
: “We are quite optimistic about 2022
given the growth we are seeing in the private capital markets. We
expect traditional subscription financing to continue the same
growth trend as in 2021. Demand for larger facilities will help to
develop the syndication market in Europe. We are also expecting an
increase in demand for bespoke financings such as bridge loans both
at an early stage of the fundraising and before the asset exits.
Risk appetite on NAV financing and demand for management company
financing will also continue the current positive trend. Given the
importance of the ESG issues such as climate change, diversity and
equality and the increase of the regulatory enforcement of ESG
disclosure and compliance expected in the coming years, we expect
an increase in the demand for ESG-linked loans.”

James York, NatWest Markets:
“Whilst the Fund Finance market had already proven its
resilience throughout the initial impact of the pandemic, this
trajectory both continued and accelerated in 2021. As managers were
able to demonstrate their ability to navigate and still deliver
returns amidst COVID uncertainties, some of the pricing adjustments
of 2020 began to revert back towards pre-pandemic levels. Looking
ahead, with the exponential growth of private capital and
fundraising success, we anticipate greater need for GP financing in
order to support the ever-increasing co-invest requirements.
Meanwhile ESG will continue to be at the forefront considerations,
with a growing emergence of SLLs and Green Loans as managers become
more advanced with respect to their sustainability integration.
Structurally, with growing facility sizes and the potential
implications of incoming capital changes under Basel IV, there will
inevitably be more consideration given to the likes of dynamic
uncommitted structures and the use of external ratings for more
vanilla subscription line facilities. We are excited to continue
supporting our clients in this regard, providing innovative
solutions throughout 2022 and onwards.”

Slade Spalding and Neno Raic, No Limit
: “Looking forward to 2022, we expect it
to be another record high fundraising year, putting more pressure
on the fund financing market which is already struggling to keep up
with the demand. To deal with the market growth, we expect current
lenders to be more selective, with a greater focus on ancillary
business. We also expect fully committed RCFs to slowly shift
toward a combination of committed and uncommitted tranches.
Finally, we anticipate that non-bank lenders will play a bigger
role across capital call, hybrid and NAV facilities, working
alongside existing banks to support the increase in the overall

Gerhard Caspar, Nordea: “2021 was
a record year in terms of overall business activity. The business
momentum has carried over into 2022 and we are predicting yet
another record year for fund finance. Demand is seemingly outpacing
supply, which we expect to translate into somewhat better terms for
lenders, both with regards to economics as well as other terms. The
ESG link in fund financings will become a must-have rather than a
nice-to-have for any reputable sponsor. NAV financings will become
mainstream as a tool to grow funds beyond their final close size.
We are much looking forward to an exciting 2022 in our

Mohith Sondhi and Fabien Bonavia, OakNorth
: “We expect the fund market to further
evolve during the course of 2022. A wave of NAV fund facilities
were expected in 2021 which never materialised. We have already
seen in Q1 2022 a material level of interest in NAV facilities and
expect this to further accelerate through 2022. Interestingly, we
think funds of all sizes, types and vintages will seek to bolster
their liquidity or access to liquidity through the year. COVID has
shown to the wider market that liquidity is key and whether this is
used for defensive purposes (bolstering existing investments) or
offensive purposes (to accelerate M&A activity at the
investment portfolio company level), and one of the key learnings
from the disruption that COVID has caused is that liquidity is
critical and the funds market has evolved to offer multiple
solutions and will continue to do so. From an LP’s perspective,
we thoroughly expect ESG considerations to play an even more
pivotal role in their investment decisions and expect this to play
a prominent part in also their choice of funding partner in the
future. It will also be interesting to see how credit funds react
to the Central Banks’ tightening of monetary policy, including
the dropping of stimulus measures and any increases in interest
rates. This may present an opportunity for private credit to
compete with banks. However, higher debt costs will also present a
challenge to funds who themselves need access to bank debt for
their own financing needs.”

Diana van Lieshout, Rabobank:
“The Fund Finance market will continue its rapid growth in
lockstep with the steep progression in private capital raising
– in particular for the expanding population of mega-funds
which are deploying capital so rapidly that fund-raising cycles are
contracting to as little as two years. Lenders will be asked to
sign up more speedily, with facilities in place at or before
fund-closing and for (ever) larger tickets. Given the breadth of
choice available to investors together with their own capacity
constraints, we expect that LPs will become even more discerning so
that it will become more difficult for new players to enter the
market, and smaller and/or mid-cap funds may face a slowdown in
investor appetite if the flight to established, more sizeable names
come to pass: i.e., the ‘IBM’ syndrome.
ESG-linked facilities will become the new normal across the private
capital financing spectrum. We also foresee a continuation of more
innovative facilities such as NAV and GP-led solutions.”

Adam Heaysman, Raiffeisen Bank:
“We are continuing to see the growth of fund level facilities
across the CEE region and expect this to continue in 2022. Across
our wider European client base, we are seeing strong demand for
ESG-linked sublines. The growth in alternatives continues across
the CEE region, and the managers of these funds are increasingly
interested in fund level facilities and the benefits they bring.
CEE-based investors are increasingly receptive to the benefits of
fund level financing. More generally we expect the increased demand
for NAV/Asset backed facilities, as a source of liquidity, to
continue throughout 2022.”

Spencer Goss, RBSI: “The Funds
Banking team at RBS International are expecting another year of
significant growth across our book of subscription lines, NAV based
facilities and GP financing. Supporting managers who are
increasingly ‘purpose led’ in their investment strategies
and incorporating quantitative KPIs to reflect those behaviours
will become ever more BAU over the coming 12 months. It’s
increasingly clear that institutional money is becoming a
complementary source of additional funding for funds and, for as
long as interest rates remain low, we expect this to continue. We
expect appetite for NAV-based financings to continue and for
borrowers to increasingly turn to the growing market of debt
advisors to help manage the search for liquidity.”

Emad Shahin, 17Capital: “NAV
Finance is fast becoming part of all leading managers’
financial toolbox for value creation and portfolio management
purposes. There are several factors driving the increased use of
NAV Finance, but to highlight a few: awareness and understanding
has increased significantly, the sheer scale of unrealised value
held in private equity assets (over $5tn globally), adoption by
top-tier managers acts as a catalyst across the market and strong
investment pace has meant that NAV transactions are happening
earlier on in the fund lifecycle. For 17Capital, those factors
resulted in record deployment of $2.8bn across 14 deals in 2021
– the overwhelming majority was with the top 100 private
equity managers globally.”

Stuart McIntosh, SMBC: “2021 was
another busy and challenging year for all with strong origination
volumes, LIBOR transition and ongoing CV19 restrictions stretching
both buy-side and sell-side teams. I predict (and very much hope!)
that 2022 will be an energising year in the market as we return to
in-person interactions with clients, partners and colleagues.
Strong fundraising continues which will drive ongoing demand for
subscription facilities, with NAV lending also seeing increasing
demand. I think the trend for many banks will be a continued focus
on existing (and target) clients where there is the ability to
build long-term multi-product relationships.”

 Standard Chartered
: “We see there being continued innovation
in the market, in particular around hybrid/NAV and the growth in
ESG-linked facilities. 2021 was a record year for us with a
significant number of ESG deals completed and numerous different
approaches used. On NAVs, we continue to be active and are seeing
more broad use of these facilities across the sectors. Overall
expectation is for strong capital raising for the top-tier GPs at
pace or higher than 2021, which will mean large facilities are
going to continue to grow in volume.”

Thomas Rapp, Wells Fargo: “We
anticipate continued strong growth of the Fund Finance market in
2022, still dominated in volume by Subscription Lines which grow in
size with Fund raising targets and require ever larger syndicates.
NAV lines and hybrids will become more commonplace and will also
help to attract institutional capital into the Fund Finance market.
ESG-linked facilities with well-balanced performance targets should
become a typical feature of Fund Finance facilities. In view of the
quantitative and qualitative growth ahead, in the Fund Finance
Segment it will remain key to attract and invest in talent

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U.S. businesses shed 301,000 jobs in January, ADP says, in biggest drop since start of pandemic

The numbers: Privately run U.S. businesses reduced employment by 301,000 jobs in January –- the biggest drop since the start of the pandemic— as a record omicron wave kept people out of work and delayed hiring plans.  Economists surveyed by The Wall Street Journal had forecast a 200,000 gain. The […]
U.S. businesses shed 301,000 jobs in January, ADP says, in biggest drop since start of pandemic