CORPORATE ADVERTISING FEATURE Opportunities Abound …
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48 FINANCE DUBLIN YEARBOOK 2021 CORPORATE ADVERTISING FEATURE Why is debt capital proving so popular with investors right now? Elizabeth Fitzgibbons-Butler: To put it simply, debt capital markets have changed since the global financial crisis where banks were chasing market share, which lead to poor lending practices and deteriorated loan documentation and monitoring. Debt capital markets have now stabilised due to the restructuring of the banking sector across three fronts: capital, asset quality and liquidity. There are now well-seasoned asset managers, and private credit and debt fund managers who fully understand the dynamics of the companies they lend to. They know what to look for when evaluating risk, and they have great new fund structures and tools at their disposal, especially here in Ireland. And, at the end of the day, debt – whether it be private or public; leveraged or un-leveraged – is an asset class that investors are increasingly comfortable with. Good quality companies will always need some form of lending, and in this low interest rate environment, we will continue to see strong demand. Why is Ireland such a hub for the debt capital industry? James McEvoy: As a jurisdiction for private markets, Ireland ticks an awful lot of boxes, especially since the introduction of the new Limited Partnership Regime and further regulatory guidance around closed- ended funds, all of which are helpful. The availability of top-tier talent and expertise, combined with a supportive legislative framework, makes Ireland an increasingly important location for investors in private assets, whether through fund structures or special purpose vehicles. With alternative lending still continuing to grow, Ireland has the potential to gain a disproportionate share of the market, and the debt space is where real opportunity lies. EFB: Ireland has always been the front runner in the debt securitisation world, so it's a natural fit for debt fund managers, particularly US-based managers, because of such a strong cultural alignment. More importantly, Ireland held its head up through the global financial crisis and also through Covid. Managers see that, and it draws them to Ireland as a place to do business. What are the key concerns for debt managers? EFB: The first is whether they can keep up with almost-ever changing regulatory landscape. The second is data management and how to turn their data into a commercial advantage. That need for enrichment of data is driven by so many factors: changes in regulation, new ESG standards, investors demanding and searching for yield, and the need to improve credit risk analysis and selection. Managers are now recognising that the best way to manage these requirements cost-effectively, without getting too distracted or falling short, is to partner with a service provider with the resources and expertise to help them keep pace with the ever-increasing competitive pressures, managers need to give priority to the growth of the business rather than its documentation and analysis. JM: Managers need to be able to visibly apply an effective oversight and control Opportunities Abound in Ireland’s Debt Capital Markets Alter Domus is expanding its debt capital management capabilities in Ireland. We asked Elizabeth Fitzgibbons-Butler, Head of Sales for Debt Capital Markets, and James McEvoy, Alter Domus Country Executive for Ireland, to share their thoughts on the growth of debt capital markets, the challenges faced by fund managers, and why Ireland is the jurisdiction of choice for the alternative investment industry. “In many respects, Ireland is a key structural environment for us. Not only is it experiencing huge growth, particularly in debt capital, but it allows us to apply best practice principles that can be shared across other jurisdictions as well. So, what begins in Ireland travels far beyond.” Elizabeth Fitzgibbons-Butler James McEvoy “There are now well- seasoned asset managers, and private credit and debt fund managers who fully understand the dynamics of the companies they lend to. They know what to look for when evaluating risk, and they have great new fund structures and tools at their disposal, especially here in Ireland.”
Transcript of CORPORATE ADVERTISING FEATURE Opportunities Abound …
48 FINANCE DUBLIN YEARBOOK 2021
CORPORATE ADVERTISING FEATURE
Why is debt capital proving so popularwith investors right now?
Elizabeth Fitzgibbons-Butler: To putit simply, debt capital markets havechanged since the global financial crisiswhere banks were chasing market share,which lead to poor lending practices anddeteriorated loan documentation andmonitoring. Debt capital markets havenow stabilised due to the restructuring ofthe banking sector across three fronts:capital, asset quality and liquidity. Thereare now well-seasoned asset managers,and private credit and debt fundmanagers who fully understand thedynamics of the companies they lend to.They know what to look for whenevaluating risk, and they have great newfund structures and tools at their disposal,especially here in Ireland.
And, at the end of the day, debt –whether it be private or public; leveragedor un-leveraged – is an asset class thatinvestors are increasingly comfortablewith. Good quality companies will alwaysneed some form of lending, and in this lowinterest rate environment, we will continueto see strong demand.
Why is Ireland such a hub for the debtcapital industry?
James McEvoy:As a jurisdiction forprivate markets, Ireland ticks an awful lotof boxes, especially since the introductionof the new Limited Partnership Regime and
further regulatory guidance around closed-ended funds, all of which are helpful. Theavailability of top-tier talent and expertise,combined with a supportive legislativeframework, makes Ireland an increasinglyimportant location for investors in privateassets, whether through fund structures orspecial purpose vehicles. With alternativelending still continuing to grow, Ireland hasthe potential to gain a disproportionateshare of the market, and the debt space is
where real opportunity lies.EFB: Ireland has always been the front
runner in the debt securitisation world, so it'sa natural fit for debt fund managers,particularly US-based managers, because ofsuch a strong cultural alignment. Moreimportantly, Ireland held its head up throughthe global financial crisis and also throughCovid. Managers see that, and it draws themto Ireland as a place to do business.
What are the key concerns for debtmanagers?
EFB: The first is whether they can keepup with almost-ever changing regulatorylandscape. The second is data managementand how to turn their data into acommercial advantage. That need forenrichment of data is driven by so manyfactors: changes in regulation, new ESGstandards, investors demanding andsearching for yield, and the need toimprove credit risk analysis and selection.
Managers are now recognising that the
best way to manage these requirementscost-effectively, without getting toodistracted or falling short, is to partner witha service provider with the resources andexpertise to help them keep pace with theever-increasing competitive pressures,managers need to give priority to thegrowth of the business rather than itsdocumentation and analysis.
JM: Managers need to be able to visiblyapply an effective oversight and control
Opportunities Abound in Ireland’s DebtCapital Markets Alter Domus is expanding its debt capital management capabilities in Ireland. We asked Elizabeth Fitzgibbons-Butler,Head of Sales for Debt Capital Markets, and James McEvoy, Alter Domus Country Executive for Ireland, to share theirthoughts on the growth of debt capital markets, the challenges faced by fund managers, and why Ireland is thejurisdiction of choice for the alternative investment industry.
“In many respects, Irelandis a key structuralenvironment for us. Notonly is it experiencinghuge growth, particularlyin debt capital, but itallows us to apply bestpractice principles thatcan be shared across otherjurisdictions as well. So,what begins in Irelandtravels far beyond.”
Elizabeth Fitzgibbons-Butler
James McEvoy
“There are now well-seasoned asset managers,and private credit and debtfund managers who fullyunderstand the dynamicsof the companies they lendto. They know what tolook for when evaluatingrisk, and they have greatnew fund structures andtools at their disposal,especially here in Ireland.”
IRELAND’S DEBT CAPITAL MARKETS
framework across their managed platformsfor their investors and regulators. We arehelping our clients achieve this, not just atfund and SPV level, but also at the assetlevel. That’s where our agency and loanadministration capabilities enablemanagers to oversee their portfolioperformance and exposures across keymetrices. A good example we see inIreland is under the regulatory frameworkfor loan originating funds. This was thefirst of its kind in Europe and sets clearrequirements in operating and evidencingkey processes when providing credit. Wesee a real demand from managers to helpget that right.
EFB: Fund and loan administration is acore requirement for debt fund managers,but they know it's not generating yield. Toincrease operational efficiencies, managersknow that technology and efficientstreamlined operations will be the driversin this post-Covid environment. We partnerwith our clients across their entire debtportfolio, providing them with back- andmiddle-office trade settlement andanalytics solutions. It’s a partnership.
We deliver data-rich information to themanager through our bespoke client portal,which enables managers to spend more time
looking at the priorities of their business.We understand that credit managers aremulti-faceted and can run multipleinvestment strategies across the creditspectrum. We are able to work with ourclients regardless of their trading strategy,be that liquid credit, secondary CLO, hybridor closed-ended private debt funds. Weunderstand credit, because it’s one of thefundamental elements of what we do.
Is that what makes Alter Domusdifferent?
JM: I think there's a growing consensusamong debt fund managers that operatingwith trusted partnerships is really the onlyroute to go. That means reliable experts,reliable technology and reliableinformation. At Alter Domus we providethis by utilising a single, comprehensivetechnology funnel. Here in Ireland, wehave a major presence dedicated to privatecredit. Together, I think that’s a compellingproposition for any international fundmanagers seeking to domicile alternativeinvestment funds in Ireland.
EFB: We believe in forming mutuallybeneficial partnerships with clients. Wecurrently deal with 17 of the world’s 20largest alternative credit managers. We’re
embedded into their businesses, and theyare equally embedded into ours. Plus,being global means working withmanagers across multiple jurisdictions.
In many respects, Ireland is a keystructural environment for us. Not only is itexperiencing huge growth, particularly indebt capital, but it allows us to apply bestpractice principles that can be sharedacross other jurisdictions as well. So, whatbegins in Ireland travels far beyond.
How does ESG fit into yourconversations with clients?
JM: In terms of ESG-themed funds andinvestment strategies, without question it hasswitched from being an opportunity to arequirement. From an Irish perspective,there's a real opportunity to become theleading ESG jurisdiction. We're alreadyseeing increased demand, so things could getreally interesting over the next few years.
EFB: For our clients, ESG is about datacollection, improving the data andbenchmarking performance. Firms wantdata enrichment to achieve betterperformance and orchestrate change.Where we help is by managing the data forthem and building the intelligent matricesthat help them put that data to best use.
49 FINANCE DUBLIN YEARBOOK 2021
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