Tue, Mar 19, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Secondary market to expand on back of regulatory change says Gamma Finance

Tuesday, November 08, 2011

amb
Florian de Sigy
By Beverly Chandler, Opalesque London:

A probably unintended result of regulatory change designed to improve liquidity and transparency in institutions is driving business into the secondary market, says Florian de Sigy, chief executive officer and founder and Ben Keefe, investment director and head of advisory at Gamma Finance.

Insurance companies will be subject to Solvency II and banks to Basel III, regulatory initiatives designed to limit the potential for a recurrence of the liquidity crisis of a few years ago. Keefe explains: "One of the main tools in the regulators armoury is the ability to charge higher regulatory capital for illiquid assets resulting in a shift in the liquidity profile of the balance sheets of financial institutions. The endgame is that institutions need more liquid transparent assets relative to before. We are seeing a raft of institutions selling off their private equity arms and this is a result of the increasing regulatory capital that the groups would need to support these businesses."

Keefe believes that it is entirely right and proper that these initiatives are being rolled out but has observed an interesting effect that may have a negative impact on the continuing recovery of funds stuck with illiquid assets. "Banks are being required to increase their capital ratio and they can do this by increasing cash or reducing riskier assets" he says. This results in a reduction in lending which impacts directly ......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1