In advance of the event, Delano spoke with Alessia Lorenti, head of business development at Edmond de Rothschild Asset Management in Luxembourg.
She moderates the “Implications of the current environment on operations” session, Tuesday 1 December at 9:05am, which focusses on private debt and European long-term investment funds (ELTIF).
AG: What do you want the audience to get most from your session?
AL: The focus of our session will be on private debt funds and Southern Europe, hearing first hand, from the initiators and managers of private debt funds, which are the needs of borrowers’ and investors’ they have to combine when setting up or running their funds, as well as how the use of the ELTIF has allowed them to broaden the investor base reach.
From your point of view, how has the coronavirus pandemic changed private debt funds this year?
The pandemic has presented unprecedented challenges across the funds industry. [General partners] of private debt funds have had to ensure the adequacy of their credit risk monitoring framework, adjusting their governance and ongoing oversight processes. In parallel, certain of the financing terms and conditions [have been] renegotiated and had to also be factored in from a monitoring perspective, as well as in terms of valuation forecasts.
What are the biggest changes you expect to see in 2021?
In 2021 we are likely to witness the emergence of new special situations, [non-performing loan] and distressed debt funds, particularly focusing on industry sectors which have been hit most by the pandemic, such as transport, leisure and hospitality. The lifecycles of the new vintages of these funds will probably be longer than what we are accustomed to, this being related to the easing by central banks during the pandemic. GPs and [limited partners], who are wary of committing to sectors severely hit, will have the time to observe how things play out and a better perception of the medium to long term outlook, whilst wanting to support these sectors, hence resulting in increasing allocations.
Aside from your own talk at the Alfi event, which sessions are you most looking forward to hearing, and why?
I am particularly interested in hearing the GP and LP insights and outlook in the PE and RE domains which Invest Europe [editor’s note: Tuesday 1 December at 1:35pm] and Inrev [Wednesday 2 December at 1:35pm] will share during their respective spotlight presentations, as well as the practical considerations in terms of ESG reporting, data collection and benchmarking [Wednesday 2 December at 9:55am].