Dechert's private credit team packed its bags for Las Vegas to attend the four-day structured finance marathon that is SFVegas, held from February 23 to February 26. Here are a few highlights:
1. Good Vibes
SFVegas is always one of the biggest annual events in the calendar for asset-backed finance ("ABF") market participants, but this year felt markedly different from the past few. Conference attendance broke previous records, hitting 10,000+ (three times the attendance at Davos), and the energy was palpable. "Everyone" was there, and they were booked and busy. Even The Wall Street Journal took notice and reported a mainstream piece. While thoughts on that article are for another CRED post, it's always nice to be noticed.
2. Let's Get Political
Post-election and macroeconomic analysis dominated the agenda. High-profile speakers debated the potential effects of the Trump 2.0 administration. While there was cautious optimism about deregulation, there were concerns around the unprecedented cuts to the federal government, the impact of tariffs and the potential privatization of Fannie Mae and Freddie Mac. America's "Charthrob" Steve Kornacki drilled into key voter shifts and showed us exactly how Trump made further inroads across swing states with rural and blue-collar voters while cutting into key parts of the Democrats' base. Despite the political uncertainties and potential related market volatility, the sentiment of most in the ABF market remained bullish, predicting continued growth of the market this year.
3. Private Credit Takes the Spotlight
The wave of capital coming into the ABF market from private credit and insurance firms was one of the hottest topics of conversation – it was standing-room-only at the private credit roundtable, on which Dechert's Sarah Milam was a panelist. Panelists noted that structures continue to increase in complexity and novelty, and that while this can be challenging from a ratings and documentation perspective, it also provides for greater opportunity and innovation. Panelists had mixed views on whether private transactions have led to increased or decreased transparency. On the one hand, there are generally fewer disclosure requirements; on the other hand, financing sources can negotiate more visibility into operations or assets. One thing that was clear is that investor appetite for private ABF is not expected to go away any time soon.
In the week following the conference, once hangovers had cleared and everyone returned to their desks to execute on freshly cut deals, 32 ABF deals hit the deal docket. Others in the pipeline were delayed due to the crowded market. Since then, while deal flow has slowed following the recent stock market plunge prompted by fears of a recession, consensus seems to be that the ABF market has, thus far, been largely unaffected.
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