A Jersey fund specialist will be a headline speaker at Europe’s leading mezzanine finance conference in Paris. Nigel Strachan, head of business development of Corporate Fiduciary at Kleinwort Benson in Jersey, will, for the second year, chair and open day one of the Pan European Mezzanine Finance and Subordinated Debt Market Conference on 26 May. Now in its eighth year, and highly regarded as the “must attend” event for leveraged finance professionals, the annual conference, of which Kleinwort Benson is a gold sponsor, attracts more than 200 attendees from around Europe. Also speaking on the panel alongside Kleinwort Benson are speakers from KKR, Park Square Capital, ICG, MML Capital Partners and Babson Capital – the major mezzanine investors in Europe Talking on the subject of “Mezzanine Finance – Are we back to business as usual?”
Mr Strachan will lead the discussion on the competitive landscape within mezzanine finance, as well as lessons learned from the past 12 months and what the future looks like for refinancing, outlining the roles for banks, bonds and mezzanine. In recent years Jersey has become a popular domicile for mezzanine funds, in particular, mezzanine funds investing in the European market. Kleinwort Benson has built a dominant position in this market with more than of €5Bn in mezzanine debt under administration. Its clients include the mezzanine funds for three major investment banks (€1.5Bn each) and the funds for three of the UK’s largest mezzanine specialist groups.
“Prior to the financial crisis, the market for mezzanine funding had been growing steadily, largely thanks to its strong position in the capital structure, which struck a balance between risk and reward,” said Mr Strachan.
“However, there are now far fewer leveraged transactions in the current market, and both the value and volume of deals incorporating mezzanine debt have fallen as a result. However, in spite of these trends, most analysts believe that mezzanine and other subordinated products will experience a renaissance over the years to come, with many saying that the first signs of recovery are already appearing. Indeed, the flexibility of subordinated debt is proving to be particularly attractive to companies who are struggling to secure debt from other sources.
“Maintaining a long-term view has been the key concept for mezzanine financing, which has resulted in a more stable, ordered market with fewer players.
“The current landscape bodes well for direct mezzanine lending, and as confidence in the market builds and more deals are done throughout 2010, fundraising conditions will improve and new funds will be set up in Jersey in 2010 and into 2011.
“With its excellent reputation as a domicile for private equity and mezzanine, Jersey will continue to attract this type of business, and its funds sector will soon return to “business as usual”.”
The Pan European Mezzanine Finance and the Subordinated Debt Market Conference will take place, 26 – 28 May, at the Hotel Lutetia, Paris.