How can RApportTM help debt asset managers?

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Areas of Interest

In order to get more of the deals you want rather than having to invest in what is available, your firm should develop differentiated approaches to other market participants:

  • Financial Sponsors – Be viewed as a preferred investor; early look opportunities; favorable access to partners and management teams
  • Banks – Inclusion in pre-marketing syndication processes; create advocates for favorable allocations
  • Companies– Viewed as a reasonable, high-quality investor that is willing to share perspectives and insight
Potential Benefits

There are a number of potential benefits, both financial and non-financial:

  • More Good Deals – Opportunity to deploy capital to quality deals with quality backers
  • More Exclusive / First / Early Calls – Get there before the rest; more time for diligence and approval
  • Larger Allocations – Opportunities to help build momentum by placing anchor orders; allocation bumps
  • Proprietary Insights – Executive introductions to sponsor management teams and banker contacts; potential proprietary insights
  • Relationship Investment Analysis – Incorporate qualitative, but structured, assessments of sponsors, companies, and banks into your decision-making process
  • Improved Access – To sponsor partners and company management teams
  • Better Market Intelligence – Active monitoring, idea flow, sharing of insights; executive transitions; company litigation
  • Efficient Origination Efforts – CTM via bankers; conference cross-checks; sponsor vintages
  • Firm-wide Brand Promotion – Easy to use tools that provide the right data at the right time
  • Differentiated Marketing – New ways to show investors how the firm is different and continues to evolve to outperform competitors
  • Proof of Commitment to Brand – Tools that demonstrate how the firm is assessing its relationships
Available Resources

In addition to having capital to deploy, your firm has other assets that could be utilized:

  • Intellectual Capital – Sector expertise; insights into companies and sectors of interest to sponsors
  • High-Quality Decision-making – Efficient processes; ability to reach a conclusion promptly
  • Investment Stability – Follow-through on unallocated commitments in secondary markets
  • Considerate Relationships – Consistent sharing of prompt, candid feedback; reasonable approach to terms, amendments/waivers, and management access requests
  • Expert Contacts – Ability to make introductions to sponsors and bankers
  • Fees – Holistic approach to banks’ origination efforts when awarding CLO mandates
  • Risk Relief – Ability to help banks manage commitment and distribution risks by helping build syndication momentum
  • Data Goldmine – Capturing and leveraging data can make all this possible
  • Process Execution – Wide-spread adherence to adopted protocols ensures seamless operation and messaging

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How much incremental OID could be gained?

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Firms that create preferred relationships with financial sponsors and capital markets groups can gain favorable treatment during syndication processes. That could mean a portfolio with larger positions in the deals your firm really likes. It also means getting more OID from those deals.

This calculator allows you to model how much more OID could be captured. Use it to see how many millions of dollars could be earned by creating RApportTM.

Example

The default parameters assume 120 deals per year, average commitments of $15mm, and allocations of $3mm. There are distribution assumptions for both the percentage of deals with a given OID (e.g., 40% with 25 bps) as well as the percentage of deals that receive an allocation in excess of your firm’s average (e.g., 35% receive a bump of $1 mm for a total allocation of $4mm).

The default example shows the result of effectively creating RApportTM could be a ~100% increase in capital deployed and a 95% increase of OID captured from preferred investments. That would translate to an incremental $1.54 million obtained from those opportunities.

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How can RApportTM help apply the
Principles of Influence?

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Facts and processes that reinforce your point can affect a desired outcome

Reciprocity
Idea generation for sponsors
Sector expertise
Insight into target companies
Executive introductions
Pro-active anchor orders
Relationship Investment Analysis (aka Balance of Trade)
Scarcity
Ability to make large commitments
Willingness to place early anchor orders
A limited number of introductions
Exclusivity of insights
Frequency of early commitments
Relationship Investment Analysis (aka Balance of Trade)
Authority
Sector activity: # deals / market share / top buckets
Early / exclusive looks provided by others
Involvement in recent deals; by sponsor
Firm’s risk profile / structures / terms
Anchor commitments
Average share of quantum by company / sector / sponsor
Consistency
# deals involved w/ sponsor or bank
# of sponsor portfolio companies
Frequency of early commitments when given the opportunity
Typical hold periods
After-market activity to reach commitment levels
Liking
# of previous deals together both as a firm and personally
Appreciative, personal comments during meetings and other events
Systematic congratulatory notes regarding successful transactions with other firms
Alignment of coverage between firms
Systematic monitoring of news source to recognize matters of personal interest and generate personal notes
Optimization of invitations to entertainment/relationship building experiences
Consensus
Sector activity: # deals / market share
Early / exclusive looks provided by banks and sponsors
Average share of quantum at issuance

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What are some of the things you will be able to say?

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Multiple Principles can be reinforced with a statement

Sponsors

Collaboration

Our firms are working well together. Over the past year, we have met with your partners X times to share our insights.  
During the past year, we have provided your firm X exclusive ideas for investment opportunities.   
We have provided anchor commitments on X of your recent financings.  
We are participants in X% of the financings done by sponsors in the Y sector during the past 18 months.  

Sponsors

Expertise

We share your enthusiasm for the Z sector. Over the past two years, we invested $Xmn in Y companies. We estimate our market share in the sector is X%.   
We have committed $Xmm dollars to Widgets Inc. via Y financings since 2015.  
X sponsors have given us direct access to management teams at Y of the companies in the Z sector.  
Our team has X years of combined experience in the Y sector.

Sponsors

Reliability

We know you value prompt decision-making. During the past two years, it has taken us an average of X days from receipt of the CIM to make a decision.  
We may not come into every deal, but we do commit to providing candid feedback. We have given sponsors direct feedback on X of the last 100 deals we have seen.   
We believe we are reasonable investors. During the past X years, we have approved Y% of the amendment or waiver requests we have seen.  
We have provided consent decisions before processes reached their thresholds on X% of the requests during the past Y years.  

Sponsors

Market Leadership

We have provided $Xmm dollars of anchor commitments to Y financings for Z sponsors during the past two years.   
When given the opportunity, we have provided commitment decisions prior to a bank meeting X% of the time.  
Our transaction volume, participation in X deals issued by Y sponsors with Z banks, and market share clearly indicate we are the leader in this sector.   

Capital Markets Groups

Preferred Investor

We can help you mitigate your distribution risk by helping build momentum. We have provided $Xmm of commitments prior to a bank meeting for Y% of the Z opportunities where we were given an early look.    
Our transaction volume, commitments of $Xmm dollars across Y deals issued by Z sponsors with X banks, and market share clearly indicate we are the market leader in this sector.    
We are taking a holistic view of our firm-to-firm relationship. Having access to some of your bankers' expertise will be a consideration when we award mandates.  
For perspective, here is how we have assessed your firm's efforts relative to your competitors.  

Investment Banks

Market Insights

We are taking a holistic view of our firm-to-firm relationship. Having access to some of your bankers' expertise will be a consideration when we award mandates.  
We are committed to rewarding banks that have demonstrated a commitment to our relationship. We hold ourselves accountable for that reciprocity by regularly reviewing these reports.   
For perspective, here is how we have assessed your firm's efforts relative to your competitors.  
During the past 18 months, we have had X meetings with bankers from your firm. From those meetings, we discussed Y opportunities that were particularly interesting.     
We truly appreciate the X one-on-one meetings and Y introductions to industry executives during the past two years.   

Sponsors

Collaboration

Our firms are working well together. Over the past year, we have met with your partners X times to share our insights.  
During the past year, we have provided your firm X exclusive ideas for investment opportunities.   
We have provided anchor commitments on X of your recent financings.  
We are participants in X% of the financings done by sponsors in the Y sector during the past 18 months.  

Sponsors

Expertise

We share your enthusiasm for the Z sector. Over the past two years, we invested $Xmn in Y companies. We estimate our market share in the sector is X%.   
We have committed $Xmm dollars to Widgets Inc. via Y financings since 2015.  
X sponsors have given us direct access to management teams at Y of the companies in the Z sector.  
Our team has X years of combined experience in the Y sector.

Sponsors

Reliability

We know you value prompt decision-making. During the past two years, it has taken us an average of X days from receipt of the CIM to make a decision.  
We may not come into every deal, but we do commit to providing candid feedback. We have given sponsors direct feedback on X of the last 100 deals we have seen.   
We believe we are reasonable investors. During the past X years, we have approved Y% of the amendment or waiver requests we have seen.  
We have provided consent decisions before processes reached their thresholds on X% of the requests during the past Y years.  

Sponsors

Market Leadership

We have provided $Xmm dollars of anchor commitments to Y financings for Z sponsors during the past two years.   
When given the opportunity, we have provided commitment decisions prior to a bank meeting X% of the time.  
Our transaction volume, participation in X deals issued by Y sponsors with Z banks, and market share clearly indicate we are the leader in this sector.   

Capital Markets Groups

Preferred Investor

We can help you mitigate your distribution risk by helping build momentum. We have provided $Xmm of commitments prior to a bank meeting for Y% of the Z opportunities where we were given an early look.    
Our transaction volume, commitments of $Xmm dollars across Y deals issued by Z sponsors with X banks, and market share clearly indicate we are the market leader in this sector.    
We are taking a holistic view of our firm-to-firm relationship. Having access to some of your bankers' expertise will be a consideration when we award mandates.  
For perspective, here is how we have assessed your firm's efforts relative to your competitors.  

Investment Banks

Market Insights

We are taking a holistic view of our firm-to-firm relationship. Having access to some of your bankers' expertise will be a consideration when we award mandates.  
We are committed to rewarding banks that have demonstrated a commitment to our relationship. We hold ourselves accountable for that reciprocity by regularly reviewing these reports.   
For perspective, here is how we have assessed your firm's efforts relative to your competitors.  
During the past 18 months, we have had X meetings with bankers from your firm. From those meetings, we discussed Y opportunities that were particularly interesting.     
We truly appreciate the X one-on-one meetings and Y introductions to industry executives during the past two years.   

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Let's discuss how RApportTM could help your firm stay ahead of the competition