s_bukley/shu,erstock Keeping Up With The Joneses Getting to Know the Private Placement Investors Association

Transcription

1 Featureflash/Shu,erstock Evere, Collec5on/Shu,erstock s_bukley/shu,erstock s_bukley/shu,erstock Keeping Up With The Joneses Getting to Know the Private Placement Investors Association

2 Market Constituents Investors Issuers Investor Counsel The Deal Issuer Counsel Agent Banks Pre-designated Counsel Regulators 2

3 Market Participants - Working Together Creation of First Model Form Evolution of Model 1 and Model 2 Form Adoption of Pre-designated Counsel Model Formation of ACIC Formation of PPIA 3

4 Who is The PPIA? Formed in 2006 o o o o o Establishes Private Placement Market Buy-side Association Provides Forum for Discussions Develops Best Practices Promotes Interest in the Primary Private Placement Market Helps participants in the Private Placement Market work together Ø Investors, Issuers, Agents, Counsel, Regulators 4

5 2014 Member Organizations Advisors CUNA Mutual Group New York Life Advantus Capital Management Delaware Investments Northwestern Mutual Capital AEGON Investment Management Fort Washington One America AIG Investments Genworth Pacific Life Alliance Bernstein Great West Phoenix Insurance Company Allianz Investment Management Guardian Life Insurance PPM America Allstate Investments LLC Guggenheim Partners Principal Global Investors Ameritas Investment Partners HIMCO Prudential Capital Group Assurity Life ING Investment State Farm Athene Asset Management John Hancock Thrivent Financial for Lutherans Babson Capital Management MetLife TIAA-CREF Cigna Investment Management Mutual of Omaha UNUM Group Columbia Management Nationwide Mutual Insurance USAA 5

6 2014 Board of Directors Pete Defazio AIG Brian Roelke TIAA-CREF Stuart Shepetin Genworth Sasha Kamper Principal Brian Keating Guardian Ed OhannessianPhoenix John Petchler CUNA Chip Fisher, Partner at Bingham, attends PPIA membership and Board meetings as PPIA s outside legal counsel 6

7 Committee Heads NAIC/SVO Brian Keating, Guardian Industry Mary Beth Cadle, Nationwide Topical Luke Stifflear, PPM Legal Brad Ritter, Delaware Interactions Ned Ferguson, NY Life 7

8 Ongoing Committee Initiatives - General NAIC/SVO Regulatory Interaction Acceptance of non-us / non-ifrs accounting standards Rating treatment for loan-backed and structured securities NAIC filing process (appeals, private letter ratings) PPIA Member Survey SOA Study of Private Placement Credit Loss Experience PPIA Website 8

9 Ongoing Committee Initiatives Standards and Best Practices PPIA Seeks to Establish Standards Streamline information gathering Enhance market efficiency Standards currently under development: Ø Amendment/Waiver Best Practices - Draft Ø Due Diligence Best Practices Standards - Draft Ø OFAC Questionnaire - Draft 9

10 Ongoing Committee Initiatives Legal Process Legal Process not always Efficient and Streamlined Process varies on each deal Role of Issuer Counsel Selection of Pre-designated Counsel Role of Agent Bank Timetable is often tight Drafting and negotiation varies by deal 10

11 Ongoing Committee Initiatives Legal Process Selection of Pre-Designated Purchaser Counsel Benefits Defined process that benefits the market Established standards expedite the timing Experienced and skilled Pre-designated Counsel streamlines the process 11

12 Ongoing Committee Initiatives Selection of Pre-Designated Purchaser Counsel Challenges Investors have limited influence over counsel selection Investors don t control timing of deal and documents Access to issuer and issuer counsel can be limited Quality of service varies 12

13 Ongoing Committee Initiatives Legal Process How Can We Enhance the Process by Working Together? Partner with the ACIC to develop and implement a process for feedback Ø Considerations Pre-designated Counsel is receptive Agent Bank Community is included Process is constructive and positive 13

14 Appendix: Private Placement Investors Association 2013 Survey Results Select Slides

15 Private Placement Questionnaire Summary of Process 38 Companies surveyed with a 74% response rate. Respondent group manages over $200bn in AUM Not all ques5ons were answered by every par5cipant Data was sent directly to Bingham McCutchen to maintain confiden5ality For illustra5ve purposes the respondents were segregated into 5ers based upon Private Placement Assets Under Management Group # of Par+cipants AUM $ billions Tier 1 9 $6.5 $42.4 Tier 2 9 $3.1 $6.0 Tier 3 10 $.57 $

16 Private Placement Assets Under Management Total = $206.9 BB [q1, 28r] PP AUM Avg (7.4) Billions of dollars Tier 3 Tier 2 Tier Tier 3 Company Tier 2 Tier 1 Source: 2013 PPIA Survey 16

17 Aggregate "Average" Portfolio - AUM by Asset Class [q3, 27r] 7% 6% 6% Tradi5onal 144a 82% Project Finance CTL Source: 2013 PPIA Survey 17

18 Number of Attorneys Dedicated to Private Placements (FTE) [q36, 28r] s y e rn to A f o r e b m u N Tier 3 Company Tier Tier 2 1 Response Avg: Source: 2013 PPIA Survey 18

19 Number of Attorneys (FTE) in Work Out Group [q35, 7r] s y e rn to A f o r e b m u N Tier 3 Tier 2 Tier 1 Company Response Avg: Source: 2013 PPIA Survey 19

20 Total Concerns Listed, All Tiers [q46, 23r] 18 rn c e n o C g L istin s ie a n p m o C f o # Concerns Source: 2013 PPIA Survey 20