One of the primary drivers of liquidity in the asset-based lending community has been the hedge funds. The growth in assets under management by hedge funds has been mind-boggling. One of the problems facing hedge funds is that the market thinks their balance sheets have the same type of Level 3 exposures, but many of them don't face the disclosure requirements as the Wall Street banks. The recent credit crunch has been exacerbated by the leverage used by hedge funds to magnify returns. And a recurring theme in many conversations is concern over the relative youth and low pecking order of many hedge fund portfolio managers, as well as a lack of workout experience in a recession. Rather than establishing reserves on an underperforming credit, stopping advances and initiating a turnaround ...
Today, hedge funds and private equity firms are playing crucial roles in business financing, firm-wide expansion, buyouts and corporate acquisitions. The secured lending marketplace is no different than any other corporate arena, and the asset-based lending (ABL) industry is now regularly looking to the alternative-investment sector on a transactional basis and, more important, as a regular component on layered deals. Experts in the hedge fund sector, as well as ABL veterans, say the future is certainly unclear but that hedge funds and private equity firms, in all their forms, remain a key part of the financing world. According to a March 2008 Strategy Focus Report on ABL funds from HedgeFund.net, global public markets are at an intersection of uncertainty, and investor demand for low v...
The Commodity Futures Trading Commission (Commission or CFTC) is amending its regulations regarding the investment of customer segregated funds subject to Commission Regulation 1.25 (Regulation 1.25) and funds held in an account subject to Commission Regulation 30.7 (Regulation 30.7, and funds subject thereto, 30.7 funds). Certain amendments reflect the implementation of new statutory provisions enacted under Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The amendments address: certain changes to the list of permitted investments (including the elimination of in-house transactions), a clarification of the liquidity requirement, the removal of rating requirements, and an expansion of concentration limits including asset-based, issuer-based, and counterparty c...
... in foreign sovereign debt is necessary to hedge currency risk, and a prohibition on doing so may b... This rule prevents such in-house lending through repurchase agreements. I believe there is ...
Asset-based lending (ABL) must become more creative and innovative in order to avoid stagnation and to insure survivability. More aggressive sources of financing like hedge funds and buyout firms are eroding the traditional base of ABL. AB lenders need to change in order to keep up with competition. Within the industry, AB lenders attempt to differentiate themselves primarily on pricing terms. The majority of AB lenders follow similar credit assessment methodologies. It is very important for AB lenders to begin considering Enterprise Values. What differentiates the AB lender from the cash-flow lender is how it views the source of repayment for the loan. In all cases, the AB lender takes a security interest in the assets financed. In the end, it is change that creates opportunity. And it...
To: BUSINESS EDITORS Contact: Brian Cove, Commercial Finance Association, +1-212-792- 9392, Bcove@cfa.com
Asset-based lending industry grows by more than 8 percent; approaches ... and large independent finance companies, hedge funds, private equity firms, floor plan financing ...
In the mergers and acquisitions market in 2005, 28 commercial finance transactions were announced representing $4.6 billion in total deal value, versus 40 transactions for $8.8 billion in deal value during 2004, according to SNL Financial LC. If the end of 2005 and beginning of 2006 is any indication, it appears that banks and thrifts, large commercial finance companies, and financial buyers will continue to aggressively seek acquisitions in the asset-based lending and factoring sectors. In an environment characterized by a flattening yield curve, banks and thrifts continue to take steps to gain better understanding of asset-based lending, while at the same time examining ways to grow the business internally or, more notably, through acquisitions. Asset-based lenders and factors should ...
... Furthermore, financial investors, including hedge funds, entered the space aggressively in 2005, see... the same small businesses targeted by assetbased lenders and factors has resulted in difficulties f...
BOSTON (HedgeWorld.com) - The hedge fund industry is putting the credit crisis behind it and skill-based investing is regaining importance in this high-volatility environment, according to a new study from financial research firm Celent. While the U.S. banking sector continues to endure a severe crisis marked by write-downs and sluggish earnings, hedge funds, though not exempt from problems like blowups and liquidations, seemingly are weathering the storm with more resiliency than most other financial institutions.
...Another big challenge was the lending squeeze, with banks tightening their lending stand...
GENEVA (HedgeWorld.com) - It was a traumatic year for a number of hedge funds, with the heaviest losses attributable to the subprime issues seen throughout the year and somewhat related liquidity squeezes that occurred in August and in November. Liquidity issues were a particularly problem for some of the more leveraged funds that were forced to liquidate their assets almost indiscriminately as they scrambled to gather collateral, some in order to meet margin requirements and others to cover a flurry of margin calls that threatened to spiral out of control. Even so, it was all in all a good year for hedge funds, according to Tom Ferrazzo, managing director at Zurich, Switzerland-based fund of funds provider Harcourt Investment Consulting, which has more than $5 billion under management....
... continues to be bullish on asset-based lending, a strategy that produced positive returns through...
Leading Hedge Fund Manager Joins Asset-Based Lenders to Revoluti..."Having hedge funds such as SSR Capital Partners, LP join the Exchange... of hedge funds focused on the asset-based lending sector, including various forms of receivables fin...
Otterbourg, Steindler, Houston & Rosen, PC, a law firm that focuses on the representation of financial institutions and creditors, including commercial banks, investment banks, asset-based lenders, hedge funds, insurance companies and other investors, is celebrating its 100th anniversary. The firm has particular expertise in leveraged finance, asset-based lending and second-lien loans, in the US and cross-border, as well as the representation of committees of unsecured creditors in large and complex bankruptcy reorganization cases throughout the US.
... expertise in leveraged finance, assetbased lending and second-lien loans, in the United State...
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