Alan McNee considers the potential convergence of hedge funds with private equity as they attempt to maintain their high returns.The distinction between hedge funds and private equity firms gets less clear-cut as the months go by. As they participate in more and more leveraged finance deals, traditionally the preserve of the financial sponsor community, some argue that there is little to tell between them.
Innovative hybrid capital is no longer the first choice for banks when it comes to capital issuance, as the growth in non-step-up securities clearly illustrates, reports Alan McNee.The Financial Institutions Group (FIG) is playing an important role as banks focus on strategies for raising capital. But a period of innovation in hybrid capital is now giving way to a relatively standardised, mature market. Paradoxically, much innovation on the part of bank issuers is now driven by the need to avoid their hybrid capital being classified as ‘innovative’ by regulators.
The market in German non-performing loans is booming as the country’s banks start an aggressive sell-off of their portfolios.Alan McNee reports. Sales of non-performing loans to foreign investors are becoming more common in Europe. Morgan Stanley, for example, bought a €430m portfolio of problem loans from Italy’s Banca Nazionale del Lavoro (BNL) last year.However, the main focus in Europe at present is on Germany, where banks such as Dresdner and Hypo Real Estate (HRE) have been restructuring their portfolios and selling them off to foreign investors. The next stage could witness the involvement of the Sparkassen (savings banks) and co-operative banks which make up the bulk of the country’s banking system.