Loan Note: The diversity debate widens; download our new fundraising report

Talking about race is a welcome and necessary addition to the diversity debate. Plus, Alcentra's major new hire and our fully interactive Q1-Q3 2020 fundraising report. Here's today's brief for our valued subscribers only. 

They said it

“A trend of ‘smart money’ pouring into Asia is emerging – in both Japan and China, we are seeing increasing numbers of opportunities for sponsor-backed corporates looking for high-quality bolt-on opportunities.”

From the Asia Access Quarterly report for Q3 2020 published by DC Advisory, the international investment bank.

First look


Race: a ‘frank discussion’ 

With the issue of diversity (hopefully) now front of mind for all organisations, a useful contribution to the ongoing consideration of the issue came from the European Leveraged Finance Association. ELFA hosted what it described as a “frank discussion” about race in the financial services industry with four senior professionals from BAME backgrounds.

The point was made that race is relatively new to the push for diversity, with initiatives having tended to focus on gender and social aspects over the past few years. The point was made that, while there is an intersection between race, gender and social diversity, they are also different.

What is clear is that although “inclusivity has improved”, there is still a long way to go. The situation was described thus: “The problem is not lack of talent but rather a lack of intentionality from firms/recruiters. Lack of role models is an underestimated issue. Still not seeing that many CVs from Black candidates. Putting KPIs around this would help quantify and act upon this issue.”

More conclusions from the discussion can be found here.

A further piece of required reading is the Alone together report published this week by the British Business Bank and consulting firm Oliver Wyman. It finds entrepreneurs from ethnic minority backgrounds suffering substantially worse business outcomes than white entrepreneurs (see here).

Alcentra names Mulshine to oversee North American sales

Fund manager Alcentra, in a bid to expand its US investor base, has named Chris Mulshine as head of US distribution – a new post – and as a member of the executive management committee. Mulshine, who previously served as global head of private credit at Lazard Private Capital Advisory, will be responsible for defining Alcentra’s long-term sales and marketing strategies in North America, and for leading institutional business activities across all client segments in the US, Alcentra said in a statement.

The move comes little more than a month after Alcentra, a European and US private debt management subsidiary of BNY Mellon Investment Management with $42 billion under management, named Jonathan DeSimone to succeed co-founder David Forbes-Nixon as chief executive, pending approval of the UK’s Financial Conduct Authority.

Fundraising, fully broken down

With $110 billion raised for private debt globally, the first three quarters of 2020 were neither great (this was the lowest total in the first nine months of the year since 2016) nor the total wipeout that might have been anticipated in the face of covid-related headwinds.

As always, we are delighted to bring you a full breakdown of that headline figure by sector, deal type and geography in our fully interactive presentation here.

Data snapshot

Prepare for mass restructurings. The scale of restructuring needs could exceed the previous peak seen after the 2008 global financial crisis, according to the Restructuring opportunities report from the BlackRock Investment Institute. One big reason is the significant growth in sub-investment grade debt since the crisis, as shown in the chart below.


Invesco swoops for GAM

Invesco Real Estate, the $80 billion US-based property manager, is the latest organisation to launch a European real estate debt platform, amid what it described as “very attractive” market conditions.

The Atlanta-headquartered manager has entered Europe’s property finance market through the purchase of an existing business. It has struck a deal with Swiss asset manager GAM to buy its commercial real estate debt finance businesses.

Read more about the deal here.

New CLO for Credit Suisse

Credit Suisse Asset Management’s Credit Investments Group has announced the final close of its Edition CLO Opportunity Fund, CIG’s first collateralised loan obligation equity-focused fund, with $265 million in capital commitments.

The fund will invest opportunistically in a diversified, actively managed portfolio of equity tranches of CLO transactions, equity in CLO warehouses, as well as CLO mezzanine and senior debt tranches. It will target primary and secondary markets in both the US and Europe.

LP watch

Institution: Virginia Retirement System
Headquarters: Richmond, US
AUM: $81.6 billion
Allocation to alternatives: 24.8%

Virginia Retirement System has pledged to commit up to $1 billion to Carlyle Diversified Credit fund, according to October meeting notes. The fund will invest opportunistically and focus on private credit investments.

The institution’s credit strategies constitute 13.8 percent of its total investment portfolio. VRS typically invests in funds that leverage senior debt and distressed debt strategies.

Today’s letter was prepared by Andy Thomson with John Bakie, Robin Blumenthal and Adalla Kim.

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