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CommentP&M Notebook

All aboard!

UK, England, Yorkshire, Goathland, North Yorkshire Moors Railway guard Peter Glenn, blowing whistle

At the beginning of September, GlobalCapital reported that bankers were preparing, with a mixture of excitement and dread, for the return of the physical roadshow. And lo, it came to pass.

This past Wednesday, the European Stability Mechanism's funding team set off by train from Luxembourg to Paris to meet investors they have not seen in person since before the pandemic. The roadshow will continue next week in Frankfurt, with CFO Kalin Anev Janse documenting it on Twitter and LinkedIn.

"Strong support for Europe’s crisis response and increased amount of European Safe Assets," he reported after the second day of meetings on Thursday. "We discussed what’s next for EMU, SGP and CMU."

Some bankers have questioned whether in person investor marketing is needed urgently enough to merit an immediate return to these events. Some are not even convinced roadshows are necessary at all in the era of video conferencing.

"We still see 99% of roadshows as being virtual, certainly until travel restrictions are further relaxed," said one.

It may be difficult to quantify the business case for physical roadshows, but most people agree that a change of scenery will be good for morale after 18 months of staring at the same four walls.

It will also be a good opportunity for teams to bond, especially where new starters have joined since the beginning of the Covid-19 crisis.

That is the case with the ESM, which recently appointed Tiny Ergo as head of asset and liability management and financial structuring. She was previously chief risk officer at KBC Asset Management in Brussels.

The supranational agency also has a new permanent head of funding and investor relations in Silke Weiss. She had already taken over on an interim basis in October 2020 to fill in for Siegried Ruhl, who is working on the European Union's own borrowing programme.

An IR calling

Over in London, UBS has picked two leveraged finance bankers from within — Oliver Gaunt and Abudy Taha — to take over the department in EMEA from Sarah Mackey, who is shifting gears with a move into investor relations in November.

Mackey had been sole head of EMEA levfin since October 2019 and has been working with speculative grade and highly geared issuers for many years. She was head of financial sponsors coverage in EMEA at Royal Bank of Scotland (now NatWest Group) before joining UBS in 2015.

UBS, as a highly rated financial institution, is a very different animal. Fitch just affirmed its A+ rating for the group, citing its "prudent liquidity management and low common equity double leverage".

FIG shoes to fill

UBS's longstanding Swiss rival, Credit Suisse, has meanwhile been shoring up its EMEA investment banking franchise, particularly its financial institutions group, which was raided by Jefferies earlier this year.

Chris Williams, a vice-chairman, has been overseeing the diminished team since the mass poaching, but will now be able to hand over the reins to a pair of permanent co-heads, Julien Lamm and Israel Fernandez.

While Lamm was promoted from within the ranks, Fernandez is a hire from Deutsche Bank, proving that the M&A and levfin powerhouse still has some pull when it comes to recruitment.

Fund financing

David Proud has left NatWest Group after 14 years. He was head of funds financing, an area in which NatWest had been active on recent big ticket deals. GlobalCapital understands that he has been replaced by James York, who takes the slightly tweaked title of head of investor-backed and general partner financing.

Lending money to private equity and credit funds is a growing business for lending banks like NatWest. Asset managers use products such as subscription lines to maximise their flexibility in deciding when to call on their limited partners for committed capital.

But as GlobalCapital reported this week, they can also be used to juice up the internal rates of return that managers advertise when rounding up capital from institutions.

“Subscription lines offer general partners a direct incentive not to call an investor's capital as long as they can,” said one fund manager, who does not use subscription lines or bank leverage. “This means that while a fund can have a strong IRR figure, the money multiple an LP receives at the end might be much lower.”

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