Funds' use of subscription lines and leverage facilities is evolving as managers seek to enhance
operational efficiencies and returns.
Debt funds and financial sponsors are increasingly calling on banks to provide subscription line and leverage facilities, in an effort to increase operational flexibility and boost returns. We speak to key market players to see how market participants are approaching these transactions.
Consumers and companies are taking an active interest in cryptocurrencies, but there is clearly a long way to go before their eventual role in personal and business finance is fully realised. To some degree, a lack of broader awareness of what cryptocurrencies have to offer is holding the industry back. But so too is a lack of joined up thinking within some projects.
“Very few of the 2,000 or so cryptocurrencies operating have a truly business-like operational structure and a hierarchy that ensures they make good strategic decisions,” says Rowan Stone, director of business development for cryptocurrency ZenCash. “All these digital currencies are still in the phase of the geeks – too complicated and clunky for many to use. People are starting to realise that by fixing this we can make traditional finance efficient.”
Liability insurers are highly averse to risks they cannot accurately quantify and that could present major payouts. Insurers’ risk aversion can be traced back to their being swamped with claims in the wake of deaths linked to asbestos in the latter half of the last century, a phase that nearly broke the Lloyd’s insurance market.
Since those claims, “many insurers routinely insist upon exclusions for various emerging risks in their policies”, explains Bob Reville, chief executive at insurtech firm Praedicat. The company found in a recent survey that 83 per cent of underwriters see their job as “protecting their company against the next asbestos”, which might be mobile phones, wifi, nanotechnology, 3D printing, fracking or anything else. “When they do that job by adding exclusions, this can leave their clients exposed,” says Dr Reville.
A confluence of demand factors is opening up enormous new opportunities throughout the lithium supply chain in Europe. While the nexus between Australian suppliers and Chinese processors remains the foremost lithium supply chain set-up in the world, as a result of the strategic emphasis placed on its progress by the Chinese government, the balance is changing.
For now at least, the European lithium value chain is in development, but that could soon advance with the help of traditional open cut mines. A leading example of this is the mine being developed by Savannah Resources at its Mina do Barroso project in northern Portugal.
A revolution in data is enabling insurers to predict risk precisely, empowered by businesses’ digital footprint gathered from property and operational monitoring systems. Insurers can also use the technology to identify trends and help clients prevent accident “events”, reducing the frequency and severity of claims.
Sensors linked to the internet of things enable information to be drawn from within organisations and workplaces, then fed into businesses’ and insurers’ risk management systems. The technology works by sensing everything from air conditioning, heat, water and electricity, to movement of workers and the operation of lorries, planes and ships. Underwriters can then analyse risk continuously, predict events and understand the cause of claims.
"I have dedicated more than 40 years of my life to mining, a wonderful industry that has helped lift countries out of poverty," says Mark Cutifani, chief executive at Anglo American. "But it is also an industry at a crossroads as society’s expectations of business rightly grow."
"We must strive for step changes in how we mine, how we can enable the full benefits and how we engage with society as a whole," he says. Anglo American's efforts to realise long-term and truly sustainable development opportunities are centred on what it calls collaborative regional development.
An interview with Ilya Kazi, partner at law firm Mathys & Squire
UK companies accounted for just 3 per cent of patent applications in Europe last year. Where does this attitude leave them as we exit the EU?
Government and industry recognise that we have to perform well in numerous fields post-Brexit, especially given that our financial sector and supply chains are likely to be negatively affected. Well-managed IP has the potential to make a major difference. The more innovation we capture and maximise, the better.
In the eighteenth edition of the Deloitte Alternative Lender Deal Tracker, we report that growth in the non-bank lending market was turbocharged in the 12 months leading up to the end of the fourth quarter of 2017, with a 32% increase from the previous year.
Direct Lending grew robustly in the fourth quarter, on the back of a consistently growing Eurozone economy. We expect continued expansion in 2018, given the sector’s strong fundamentals and the ongoing search by firms for alternative sources of capital.
Smart investors have long recognised the infrastructure sector’s relative stability and reliable growth potential, and therefore its quality as an asset class. Yet the infrastructure environment has changed radically in recent decades and this presents challenges the industry must respond to.
“Infrastructure is a much more complex place to invest than it was 20 years ago,” explains Boe Pahari, managing partner and global head of infrastructure at AMP Capital, an investment firm with tens of billions of dollars placed in the industry.
Mergers and acquisitions (M&A) insurance first came to prominence in the private equity industry in the 1990s as dealmakers looked for ways to manage deal risk and improve execution. In the last five years, there has been a significant uptick as corporates, private equity and other financial investors increasingly adopt M&A insurance to secure investments and enhance returns.
Understanding how insurance can mitigate M&A risk effectively is paramount for both sides in a transaction. Savvy dealmakers are looking to professional services companies such as Aon to help clients manage risk.
A selection of articles, reports and other content.