Brief: Private equity firm General Atlantic is teaming up with veteran credit investor Tripp Smith to launch a roughly $5bn fund that will provide financing to companies hit by the new coronavirus pandemic, according to people familiar with the matter. General Atlantic, which typically takes minority equity stakes in rapidly growing companies, is forming a joint venture with Smith’s credit-focused firm Iron Park Capital Partners LP, the people said. Atlantic Park, as they have dubbed the venture, will provide structured equity and debt financing to previously healthy companies now facing distress because of the pandemic. Founded in 1980, General Atlantic has $35bn in assets and offices around the world. Under chief executive Bill Ford, the firm has made its name by investing in successful technology companies, such as Alibaba Group Holding, before their initial public offerings.
Brief: Swiss asset manager GAM has stepped up its cost cutting initiatives after recording outflows as it gets hit by the Covid-19 pandemic. The firm has now unveiled plans to make at least CHF65m ($67m) in cost cuts by the end of 2020. This is more than twice the amount of cost cuts originally targeted by the end of this year. In February, GAMannounced a strategy overhaulthat was centred on three pillars – efficiency, transparency and growth. According to that policy, the firm aimed for CHF30m in cost savings by the end of 2020. The firm’s assets under management (AuM) totalled CHF112.1bn at the end of March 2020, versus CHF132.7bn at the end of 2019.
Brief: Free money. That’s the enticing prospect hedge funds and other trading firms are pondering after realizing they too might be able to participate in a historic U.S. stimulus package to keep small businesses alive through the coronavirus pandemic. Since early April, law firms have hosted Webinars and sent out alerts, and accounting firms have reached out to clients, all with the goal of explaining how they might be able to tap into the Paycheck Protection Program. The $349 billion package administered by the Small Business Administration provides loans to cover payroll, rent and utilities for up to eight weeks. The loans can convert to grants if recipients retain or rehire their workers.
Brief: AMP Capital's wholesale Australian property fund is moving asset valuations from quarterly to monthly, has fixed the distribution payouts for this year and is altering withdrawals during the COVID-19 pandemic. The fund, which currently allows monthly redemptions, allows only 5% of the funds' total net asset value for withdrawals every quarter. It has deferred its April 15 withdrawal date to May 15. The fund's constitution allows it to widen payment times beyond the 12-month processing time. "It's not considered in the best interests of all investors to maintain monthly redemptions in the current economic environment. However, the changes we have announced provide investors with an ability to redeem up to 20% of their holding in the short term, with full payment made for any redeemed units over and above this threshold within 12 months," AMP Capital said in a letter to investors last week.
Brief: One of Canada’s largest private lenders is freezing redemptions. Bridging Finance Inc. said in an letter to investors Monday that it has gated its funds indefinitely “to maintain investor value and limit pandemic effects.” The non-bank lender has C$1.6 billion ($1.2 billion) in assets under management with the most of its direct lending funds invested in collateral-based bridging loans, inventory and accounts-receivables financing. Request for redemptions spiked to about 15% of the assets from the usual 5%, which prompted the gating, Chief Executive Officer David Sharpe said by phone. The news was first reported by the Globe and Mail newspaper.
Brief: Founder of the once-mighty Middle Eastern private equity firm Abraaj has tested positive for COVID-19, it emerged on Monday. Naqvi has said that he is undergoing treatment at a private hospital and that he is “on the road to recovery”. “Today is my fourth day in the hospital and I am praying that they [hospital staff] will let me go home soon; my cough is definitely better, my oxygen saturation is heading in the right direction,” he said. Naqvi said that he was still low on energy but understood that it was due to the fact that his body was taking up a lot of strength to recover from the virus. He praised the doctors and nurses at the hospital for taking care of him.