Haynes Boone is betting on fund finance’s increasingly structured future by hiring seven attorneys from Seward & Kissel. The new squad will focus on such emerging arrangements as synthetic risk transfers, collateralized fund obligations and securitized subscription lines.
Albert Tan, who co-heads Haynes Boone’s fund finance practice group, said interest from its banking and insurance clients is driving the law firm’s plans to enhance its capabilities.
“We realized that in order for us to continue that full-service offering for our fund finance clients, we needed to supplement and strategically add this piece of debt capital markets practice to our existing finance practice,” he said.
The attorneys will be involved with the law firm’s fund finance and securitization practices.
The new group includes partners Jeff Berman and Greg Cioffi, who have a combined 50-year track record in structured finance and securitization. The pair, along with Tan, discussed Haynes Boone’s plans in an interview with Private Funds CFO.
The other hires are Andrew Robertson, a partner; David Sagalyn, who is counsel; and Grace Nealon, Mariah McGuirk and Brendon Vetter, who are associates.
The group has already hit the ground running, per Berman.
“We’ve ported over a number of clients and business,” he said. “We’re busy and we expect the fund finance synergies with the current Haynes Boone fund finance team to really bring to fruition a number of transactions pretty quickly. We’ve already integrated, we knew a lot of the team in advance and we are working on products already.”
Cioffi also noted the team’s extensive client continuity.
“With very, very few exceptions, we’ve imported all of our clients,” he said.
Complementary skill sets
The new hires bring experience that includes working on SRTs, rated note feeders and collateralized fund obligations.
And the enlarged firm will be capable of providing legal representation on the buy side for these types of instruments. Cioffi noted that he and Berman have worked with insurance companies, helping them to invest in assets that provide more favorable regulatory capital treatment.
On the lending side, Tan mentioned the emergence of securitized sub lines, pointing to Goldman Sachs’ success in packaging the facilities for broad syndication last fall. He added that Haynes Boone’s banking clients are interested in trying something similar.
Interest in securitized sub lines and SRTs has come against the backdrop of a hemmed-in market for the capital call-backed facilities.
Banks have had to grapple with the impending Basel III Endgame regulatory capital regime, and eased up on their sub line lending so they wouldn’t hit their internal lending caps. And the 2023 US banking crisis acted as a sucker punch to the market, with the failure of two prominent lenders and the rescue sale of a third.
In a survey of market participants that’s included in Haynes Boone’s Fund Finance Annual Report for 2024, 52 percent felt the industry’s market demand and supply are mismatched. And as for closing the gap, a combined 52 percent of respondents said they were either working on an SRT, finished one or may consider it, when asked about their involvement with the credit-risk instruments.
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