Regional Head of Americas and Global Capital Markets Service Line Leader, James Maitland talks to GlobalCapital to discuss how the captial markets are reacting to the current period of distress and the lessons the markets should take away from the turbulence.
Where does Ocorian sit in the capital markets and structured finance ecosystem? What services are you providing for your clients?
We are a full service corporate and fiduciary services provider, with a global footprint of 16 jurisdictions. We support the full range of capital markets players and activities, from unsecured corporate and institutional clients, to some of the most complex structured finance and structured credit vehicles in the marketplace.
A great example of that is a CLO that requires a Cayman presence. We facilitate and support not just the establishment of the entity, but we also provide a host of additional administrative and compliance services.
We support a broad array of institutional and individual clients across the globe, whether in the context of capital market or private client activities. In addition to our extensive corporate services offering, we provide a wide range of capital market, fund and private client services. We are uniquely able to seamlessly deliver consultative and integrated solutions; for example, our individual and institutional trust clients can also require capital markets support.
From a structured finance perspective, we do a lot of work supporting structured credit activities and are one of the leading CLO service providers. We also provide a wealth of support for other structures in the insurance and insurance linked securities space, as well as ABS structures.
How do you see the current period of distress developing?
The level of adaptive resilience throughout the pandemic has been very impressive. I think this is significantly informed by our collective experiences throughout the 2008 crisis and its aftermath. There are a whole host of players, particularly in capital markets (especially in the structured credit space), who have personally navigated previous seismic events. As a result, many players have applied their experiences to preemptively deal with major market events with a much greater degree of pragmatism.
We have witnessed a veteran approach where market participants have seen a host of unprecedented developments, calmly assessed a dramatically evolving situation and stayed very closely connected with the market to monitor volatility and assess windows of opportunity.
Overall, we've seen some slowdown of activity in structured credit and other areas, driven by market appetite or volatility. Feedback from clients and partners is that it's not a matter of shelving transactions, but more of extending warehouse periods and/or deferring issuance until the market environment stabilizes to an extent that would facilitate the investment strategies of the respective vehicle(s).
What value does Ocorian provide to clients with regards to navigating these periods of distress and identifying emerging opportunities?
First, it is the partnership aspect. Staying close in times of uncertainty and ensuring that we understand the challenges and motivations of our clients and market counterparties. Also making sure our clients are aware where we can provide support, expertise and perspective.
In the structured credit space, we make sure that we are completely aligned with clients' strategies and priorities. Many, especially loan related players, are looking at their warehousing periods, the profile of their book and the potential for impaired asset performance, resets, restructuring or refinancing. We continue to proactively engage our partners to understand their challenges and provide appropriate support.
Can you talk about Ocorian's technology and what tools you are providing for clients to help them through current events?
We've made very significant investments to bolster our technology infrastructure. The stability and resilience of our operation is a direct result of two things: one is our infrastructure, and the second is our people. Their dedication and focus in supporting our clients has been fantastic, greatly facilitated by the success of our technology infrastructure.
The flexibility of our remote access arrangements, for instance, as well as deploying portals that target specific clients or counterparties has been very well received. We are ensuring that this functionality is both stable and secure and we have made a host of proprietary investments to ensure our cyber security remains best in class.
What lessons do you think the market should take away from this period to ensure it can weather future events?
On a practical level, the effectiveness of remote working is going to have a residual effect across the industry. When things go back to "normal", there will be more flexible work arrangements that will provide a natural degree of contingency and resilience. I think the technology has been tested at an industrial level through this period; the market will continue to seek ways to optimize technology and remote work flexibility in the future.
A key focal point in the aftermath of the pandemic is how participants will adopt new methodologies to efficiently identify opportunistic plays to diversify and bolster their portfolios during periods of uncertainty and/or volatility. I suspect we will see a broader level of adaptive diversification whilst clients remain true to their core investment ethos.
Experienced in evaluating structured finance securities and other complex financial structures, we provide a full suite of administration and fiduciary services to an impressive range of CLO and structured finance industry participants, ensuring that all structures remain compliant.
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