By Marie-Laure Mounguia and Gautier Despret, Co-chairs of the Private Debt Technical Committee
As featured in LPEA Insight/ Out magazine #20, December 2021.
Over the past months, the appetite for investors in alternative and especially in private debt seem to be constantly growing globally. In 2020, Marie-Laure and Gautier convinced the LPEA’s Executive Committee to revive the existing debt committee to promote the Luxembourg private debt space and to discuss hot topics. To differentiate this committee from the previous one, Marie-Laure and Gautier contacted asset managers active in the private debt industry and Luxembourg-based service providers (auditors, lawyers, accounting firms) to represent the marketplace.
The goal of the debt technical committee is to focus on key subjects having direct or indirect impacts on the full spectrum of the private debt industry. Doing so, the debt technical committee makes the voice of the Private Debt market heard and raises awareness on the specificities of this asset class. At current date, the members are discussing topics covering the IBOR transition, peer-to-peer lending, the amendment of the securitization law, among others topics. Depending on the matters to be discussed, the committee is divided into sub-groups to increase the participation, to create efficiency, to promote and encourage the exchange of views and to allow each member to provide the group with their expertise and experience on each discussed matter.
In order to keep the committee very active and manageable, we have decided to limit the participation to 20 members with a full gender and industry representation balance. The committee is composed of highly experienced and well-regarded debt experts comprising representatives from Allen&Overy, Arendt&Medernach, Clifford Chance, Elvinger Hoss Prussen, Alter Domus, IQ-EQ, Aztec, Brown Brothers Harriman, Carne, HACA Partners, PwC, EY, KPMG, AEW, Bridgepoint, Raiven Capital and Partners Group.
Inter and intra-connection
The committee also ensures an excellent connection with the other debt hubs of the debt sphere by actively participating into common projects with the debt group of the ALFI, the other technical committees and/or clubs of the LPEA and pan-european organization like Funds Europe. Recently, our valuation debt experts issued a white paper covering the main challenges faced by debt managers while valuing Private Debt instruments. The paper addresses, among others, the influence of the investment strategy, the prevalence of inherent credit risk over market yield, the failure of traditional option pricing models and alerts on the urgent need for dedicated valuation guidelines tailored for this asset class.
The whole committee meets twice a quarter to define the areas to be covered and the strategy proposed. Then the frequency of the meetings of each sub-working group highly depends on the type and the complexity of the topic under discussion. They generally meet twice a month. During the COVID pandemic all meetings were virtually held via Teams. We will propose the members to be back in a person meeting mode for the coming sessions.
How to join
Debt experts interested in joining our technical committee are welcome by filling in the application form, by contacting the LPEA or Marie-Laure/Gautier.