Last week, over 800 industry insiders made their way through a rain soaked Manhattan and attended CREFC’s June 2014 Conference at the Marriott Marquis Hotel in New York City. On Monday night, over 200 guests found their way (luckily, right after the rain had ended and the skies cleared) to Dechert’s party at the Refinery Hotel Rooftop to meet with colleagues and friends over drinks and hors d’oeuvres.
Although the highlight for many at the conference was the conversation with Sam Zell and what has become a CREFC conference staple, the market update roundtable discussion, all of the forums and panels were well-attended and offered the usual insight and entertaining commentary on the state of the industry.
For the most part attendees and panelists alike are optimistic about the next half of 2014, but a few general trends did emerge during the conference:
1. Many are tired of the regulatory uncertainty. Most notably–final risk retention rules still haven’t arrived.
2. Macro-economic fundamentals remain troublesome in some sections and the recovery has been jobless, slow and uneven. Some are concerned about foreign policy and its affect on the US and world economies.
3. Many agree that the current environment (i.e., low interest rates and lots of liquidity) make it a great time for those on the equity side of the equation.
4. Some investors continue to voice their concern that some of the common pre-crisis loan features (i.e., IO loans, general decrease in debt yields and erosion of structural quality) are back en vogue.
5. Yields, yields, yields! How do you get the yields desired? Where do you get it? These questions seemed to resonate with lots of industry players, especially in this ultra competitive market place where you have lots of competing factors, such as new entrants into mezz debt pushing down yields and low interest rates making it generally impossible to move on pricing.
All in all it was another fun and informative conference and we here at Dechert are excited about the next half of the year!