Oceanrock Consulting’s Post

Great working on this short piece summarizing the use of NAV loans by Private Equity firms. Sebastian Watson, Siyabulela Herimbi, CA(SA), Keeno Koopman and I honed in on two examples of how these funds are being used: 1. Funding portfolio company growth, as done by firms like Blackstone and Warburg Pincus LLC 🚀 2. Distributing dividends to LPs, as done by firms like Vista Equity Partners and PAI Partners 💵 What do you think about PE's use of NAV loans to distribute dividends to LPs, is it fair play or value destructive? 🤔 #PrivateEquity #NAV #NAVloans

Fitch Ratings is cautiously stepping into the growing NAV loan sector by unveiling backed by LP fund interests. The agency has shared for NAVs supported by LP secondary interests, with intentions to evaluate other NAV categories in the future. Read the story here to learn more: https://okt.to/qyEsOF #PDI #PrivateDebt #Investors #FundManagers #FundFinance #NorthAmerica

Recently Funded! A few closings from the second quarter of the year. Q2 had a lot of movement with treasuries and overall market changes, but our team was able to execute on quite a few transactions. Being able to make deals in a rollercoaster market is as important as anything from my perspective. Some borrowers came for a cash out, some to avoid maturity, and even partnership restructures/buyouts. We were able to provide favorable terms in order to help borrowers reach their long term goals. Triniti Boykin Daniel Klosk #multifamilyfinancing #sfrealestate #sfr #multifamily #multifamilyinvesting #student #multifamilyrealestate #crefinance #growwithcorevest

AllianceBernstein has published a comprehensive whitepaper examining the expanding role of NAV lending in private equity. This insightful document delves into how NAV loans provide a non-dilutive capital source for private equity sponsors while benefiting limited partners and lenders. Explore how NAV lending can unlock value and add a complementary asset class for asset owners. #NAVLending #NAVLoans #FundFinance #PrivateDebt

I encourage everyone to take a moment to learn about how GPs and LPs both alike are using NAV solutions to facilitate portfolio value creation and unlock liquidity. Hark Capital's Managing Partner, Doug Cruikshank, will be covering these topics on a panel alongside Jocelyn Hirsch of Kirkland & Ellis and Gopal Narsimhamurthy of KBRA. #FundFinance #NAVFinancing #NAVLoan #NAVLoans #ManagementCompanyFinancing #MANCOLoans #PortfolioFinance #Leverage #NAV #Liquidity #ValueCreation #PrivateEquity #PrivateCredit #GrowthEquity #PrivateMarkets

Regional Banks are one the Strategic Income Fund’s main competitors, however face a tremendous amount of headwinds in 2024. Due to challenges within their existing portfolios, especially delinquencies and defaults in the Office sector, Regional banks are hesitant to lend on commercial real estate and take on additional risk. The Strategic Income Fund focuses on what JT Capital does best, and the partners of JT Capital have been doing for over 15 years - fill this financing void, and invest in high quality multifamily assets. View our current offering: https://lnkd.in/g_PNdWTV #JTCapital #fund #multifamily #multifamilyinvesting #invest #investing #investment #investor #bank #privatemoney #privateequity #commercialrealestate #commercialrealestateinvestor #opportunity #realestate #realestateinvesting #financialfreedom #propertyinvestment #property #commercialrealestateinvesting #realestateIRA #opportunity #wealth

😎 An evolution in the Private Credit sector? 📰 Check out this article from Yahoo Finance that spotlights Apollo Global Management, Inc.'s plan to build out a trading desk for the $1.7 Bn (and growing) private credit market. 💧 Although the concept is still preliminary, it could provide liquidity for many Private Credit funds and investors. 💱 Others players like Golub Capital, JPMorganChase and Antares Capital LP have pursued similar strategies trading loans.

Our Managing Partner, Doug Cruikshank, will be featured at SuperReturn North America on a panel entitled "Pathways to liquidity: The Evolution of Fund Finance". The discussion will cover the relevant questions GPs and LPs are asking as they navigate today's private markets landscape including: How are GPs using fund finance and NAV loans to facilitate AUM growth and source liquidity for portfolio companies? How can managers use NAV lending on behalf of LPs to unlock liquidity? What are the questions investors are asking when structuring NAV loans? Are they becoming more comfortable with leverage at the company level? Who are the key providers of debt and how do they get comfortable with the lending risks? How big is the market going to get? We encourage everyone to come and learn about the evolution of fund finance. #FundFinance #NAVFinancing #NAVLoan #NAVLoans #ManagementCompanyFinancing #MANCOLoans #PortfolioFinance #Leverage #NAV #Liquidity #ValueCreation #PrivateEquity #PrivateCredit #GrowthEquity #PrivateMarkets

Bloomberg reports that Apollo Global Management, Inc. is considering a bold move into the private credit market by developing a trading desk for direct loans. Authors Carmen Arroyo Nieto and Libby Cherry note that although this plan is still in its early stages, it follows similar initiatives by Golub Capital and JPMorganChase, both of whom have been active in this space. As the private credit market evolves, Apollo's potential entry could offer new liquidity options for investors while sparking concerns among market participants about the value proposition of direct lending. https://lnkd.in/eBu5tAbd #PrivateDebt #PrivateCredit

Private Credit Fund Burned by Risky Bets Is Bleeding Cash Canary in the coalmine? The upshot of this article is how Prospect is using additional forms of debt and capital raising to cover up for a rapidly deteriorating portfolio. One tool the article focuses on, Payment In Kind or PIK debt, is pervasive throughout private equity and debt markets. PIK debt pays interest in-kind, rather than in cash. What is perhaps different is the way Prospect is using bond and preferred equity sales to retail investors to generate cashflow to pay prior investors. What isn't surprising is that much of what Prospect is doing seems to be part of the current playbook of the overlevered alternative/private capital industry. Two examples: Arbor Realty and Blue Owl. Blue Owl is most similar to Prospect in that it is a Business Development Company focused on Private Credit. I reviewed Blue Owl's loan portfolio and found 4 out of their 10 largest loan exposures were PIK Debt (at least in part). Similarly Arbor Realty has been engaging in massive loan modifications. A large percentage of these mods include a deferred interest feature (AKA PIK debt). Arbor books the deferred interest into income despite the fact that it's not due until maturity. If deferred interest debt or PIK debt provides a roadmap to a permanent solution, all good. But I fear, as this article implies, deferred interest debt and similar is just delaying the day of reckoning. This is all part of what I have been referring to as "stage managing the debt bubble". (see my article below for more). https://lnkd.in/d3t7t2KG #privateequity #privatedebt #leveragedloans https://lnkd.in/dsfWteT6