The last blog post I wrote on the US private placement market was several years ago. I am excited to report that, since then, the market continues to evolve. Most years, Intralinks attends the Private Placements Industry Forum in Florida, where dealmakers convene to talk about their perspectives surrounding globalization, regulation, infrastructure, the impact of Brexit, the future of the insurance industry, cross-border deals and much more.
This year, it was a pleasure to be able to speak to industry participants and receive feedback about how we can further partner with banks and issuers to make their financing process more seamless. What’s the talk of the town? Besides mixed reviews of the venue (attendees thought the hotel layout was too spread out), here’s a quick recap of some of the panels I was able to catch and conversations we had:
What’s going to influence private placement issuance?
- Twitter being a credible news source #POTUS
- Will there be a freeze on Dodd-Frank?
- Trump’s vast power to reshape the Fed
- Increased profits as a result of the rising interest rate environment
- Tax repatriation and its effect on M&A activity
- European interest rate environment
- Era of protectionism
- China growth slowdown
Why is the private market resilient?
This market is unique because it allows issuers more flexibility compared to public markets. Arrangers point to the following benefits of issuing in the private market:
- Tranching alternatives (size, maturity, etc.)
- Call flexibility
- Delayed takedowns
- Foreign currency tranches
What does the landscape look like?
In 2016 there was circa $60 billion in private placement issuance; volumes have already been consistently above $50 billion for several years. Every year industry experts are asked to predict what they believe the volume will be next year. This year they were also asked, “What is the next big thing besides infrastructure?” We all know the Trump infrastructure story already … Angus Whelchel, Managing Director in the Private Capital Markets team at Barclays, predicted $70 billion of issuance with a small opportunity in the FIG sector. Miguel Picache, Managing Director and Global Head of Private Placements at Citigroup Global Markets Inc., predicted $72 billion of issuance with an opportunity in transportation sector. Jamie Egbert, Executive Director and head of the J.P. Morgan Private Placement Syndicate Desk, also predicted $70 billion and was bullish on contract monetization and the sports sector. I can’t wait till next year’s conference to find out who was right on which sectors investors will buy in 2017!
What did we hear at our booth?
On the flipside, while sitting at our booth, the most valuable feedback we heard was that the buy-side loves receiving their deals on the Intralinks® platform. Investors told us that they would also prefer to get their post-closing deal and compliance documents via Intralinks instead of email or even snail mail. This way, investors know to just go to Intralinks for any private placement document they need. When issuers leverage Intralinks to deliver post-close documents quickly, easily and securely, they can build on their existing investor relationships and raise funds more effortlessly in the future. Read about how to be a good borrower here. I can’t wait to have more conversations next year about how we can partner with this market to help make the deal process more efficient.