In advance of the event, Delano spoke with Diala Minott, a partner with Paul Hastings in London, She speaks on Tuesday’s “PE Structuring trends: the how and why” panel.
Aaron Grunwald: What do you want the audience to get most from the “PE Structuring trends” panel?
Diala Minott: An idea of what parallel funds are being used for nowadays and see any trends to emerge
Is Brexit a good or bad thing for Luxembourg PE funds?
Neutral. The impact I believe should be low and most managers have already implemented Luxembourg AIFMs as a backup plan.
What are the most interesting PE structuring trends that you see emerging?
I am seeing a strong trend towards unregulated structures, moving away for regulated structures. This has been led by the regulators relaxing their banking monopoly rules such as in Germany and stating that another pair of eyes is no longer required if you have an AIFM since the AIFM will indirectly regulate the fund by its compliance with AIFM.
I am also seeing a lot of co-investment structures now that the direct lending market has reached maturity and you see a lot of competition at the asset level leading to funds overallocating to their asset class to then syndicate out to investors. Investors also want to learn more about the origination skills and the credit analysis and have exposure to credits they could not obtain on their own making co investments popular.
The other string trend is really inherited from the US--the rise of “evergreen” funds with lives of 20 years and more. This allows investors to allocate to an asset manager for the longer term across different strategies with differing economics through one bespoke vehicle. This aids the manager who can also source assets without any pressure to deploy quickly making the selection of credit better researched.
We are also seeing the rise of distressed loan funds in preparation for a credit crunch--we are seeing dual strategies from clients--again inherited from the US.
Aside from your own talk at the ALFI event, which speech or panel are you most looking forward to hearing, and why?
Brexit discussion, given I am from the UK I would like to see if people really think it will be detrimental to the UK. Also the ATAD and BEPS panel given the current tax environment.