WHAT WE LEARNED AT OUR 2019 CREDIT FORUM
To say that the women in credit are becoming a force would be an understatement. Our 2nd Annual Kayo Women’s Credit Forum grew over 50% from last year with a sold out audience of women in distressed debt, mezzanine lending, private credit and private equity.
Against the backdrop of the Boston Harbor Hotel, women gathered for one day of networking and topics that covered challenges, trends, and learnings in credit. Below is a summary of what we experienced, but if you really want to be part of the action, you’ll have to join us for two days in 2020.
PRIVATE CREDIT – NO LONGER THE UNDERDOG ASSET CLASS
Private credit is no longer the underdog asset class according to our Keynote Speaker Sylvia Owens, Global Private Credit Strategist at Aksia. She should know after spearheading efforts to increase awareness of Private Credit as an asset class for more than a decade. As she playfully paralleled her findings by including real life dogs from her colleagues at Aksia, it was all serious business when it came to the investment opportunities in this newer, but not small, asset class. Most investors are under-allocated to private credit versus their target, but the majority of investors plan to maintain or increase their allocations.
STRATEGICALLY MANAGING CREDIT ALONGSIDE PRIVATE EQUITY
Patricia Lynch (Ropes & Gray) led the discussion around the growing number of firms that have equally active credit and private equity platforms. This panel, which included Laura Holson (New Mountain Capital), Marisa Beeney (GSO Capital Partners), Kristine Jurczyk (Vista Credit Opportunities), and Karen Simeone (HarboutVest Partners) made it clear that there is no magic ingredient to avoiding conflicts when managing private equity alongside credit, however, minimizing headaches is possible. Each firm highlighted that there are a number of different ways to manage a multi-strategy platform, but consensus was that through well-defined structure and rules of engagement in place, firms can greatly benefit from the overall corporate intellectual capital.
BREAKOUT SESSIONS PROVIDED DEEPER INSIGHTS
With four break-out sessions, attendees were able to choose their track and take a deeper dive into the world of private credit with our talented speakers.
1. VENI, VIDI, VICI
As the opportunity came about in credit, many women leaders seized the opportunity. They came, they saw, and they conquered by launching their own firms. Carrianne Basler (AlixPartners) drew out the origin stories of five female founders in credit who have shaped the industry with their specialized investment strategies, including Jeri Harman (Avante Capital Partners), Andrea Grosz (Lightspring Capital Partners), Melanie Brensinger (Anagenesis Capital), Carolyn Galiette (Ironwood Capital), and Rui Falcon (Princeton Asset Management). Hearing from these incredible group of founders was a highlight. Their openness and insights were inspiring and likely several women in the audience will be following in their footsteps. Check out The Podium to read our piece on Tips for Emerging Fund Managers.
2. IT’S COMPETITIVE OUT THERE
Artis Lin (Golub Capital) joined together with five other competing firms, who put up the white flag to have an open discussion about competitive trends, financing options, and how they are positioning themselves to win. The panel included, Engin Okaya (Prudential Private Capital), Cheryl Carner (Crystal Financial), Martha Gurwit (Antares Capital), Mandy Epler Brown (Crescent Capital) and Carey Davidson (Monroe Capital).
3. OPPORTUNITIES AS THE CYCLE TURNS
Jennifer Press (Duff & Phelps) facilitated a panel discussion posing the popular question: is this cycle nearing old age and susceptible to a downturn? The resulting discussion amongst Amanda Lynam (Goldman Sachs), Monica Aggarwal (Fitch Ratings), Nicole Drapkin (Owl Rock Capital Partners), Becca Schlagenhauf Stull (Northwestern Mutual Capital) and Melinda Jackson (Cadence Bank) led to a vigorous debate and discourse. Findings from one firm’s research spanning the past 20 years indicated that 1) Free cash flow and PEG ratios are the biggest return drivers, or said another way, the most highly correlated with returns over time, 2) Small and mid-sized deals consistently outperformed the mega deals, and 3) Cyclical and commodity businesses underperformed mostly all other types of companies.
4. WHAT DO THE LPS WANT?
Kassie Taylor (THL Credit) posed this question to our LP panel, which unfolded a wide spectrum of investor needs. According to our panel, which included Dulari Pancholi (NEPC), Elizabeth Weindruch (Barings), Mary Bates (Meketa), Chrystalle Anstett (Eaton Partners), and Amy Hsiang (RVK), experienced LPs are looking for more specialized strategies (such as drug royalties and aviation) whereas newer players are looking at larger, more established funds. Distressed funds were also mentioned as a potential attractive investment as the cycle turns.
NETWORKING MEETS PROGRAMMING
Our roundtable networking lunch provided attendees the opportunity to join a table taking a deep dive into one of 17 topics related to credit. Topics included Where to Invest in Credit Late in the Cycle, Best Practices for Diversity & Inclusion, Negotiating to Win, and many more.
TO INFINITY, AND BEYOND?
Jessica O’Mary (Ropes & Gray) is not a fortune teller. However, she does advise hedge fund and private equity advisers on all aspects of their business. Leveraging her broad scope, she quizzed five of the leading investors in credit on what they think the future holds. While some spoke from an institutional investor’s perspective like Sheila Finnerty (Liberty Mutual Investments) we also heard from credit investors of various shapes and strategies including Jay Ramakrishna (AB Private Credit Investors), Purnima Puri (HPS Investment Partners), and Olga Kosters (StepStone Group). Consensus was that private credit has a place in all market environments, LP interest is high in the asset class, yet more cautious when selecting first time funds.
This year’s event was oversold and the feedback was incredible. Every. Single. Attendee said they would return in 2020, and 100% would recommend this program to a friend. Next year we’re not only doing it again, but we’re going bigger and broader. It’s not too early to apply to speak or get involved. Visit our event page to learn more and be first to get event news.
Check out our photo gallery and get on the list for 2020 to be first to know about programming, our call for speakers, and registration.
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