Dear LMA Members
Firstly, I would like to sincerely thank you all for your welcome and support since I joined as CEO of the LMA just a few short months ago. It was great to meet many of you at our Annual Conference at the QEII Centre in September. I was really energised right at the start of my time with the Association by the passion and commitment of close to a thousand attendees.
It’s a great privilege for me to join at a time of significant change for the loan market in EMEA. Shifts in the risk environment, evolving banking regulation, the growing participation of institutional investors, the rise of technology and our members’ sustainability commitments are all impacting this critically important market, which is set to deliver in 2023 close to $1 trillion in loan volumes across EMEA.
I look forward to representing your interests over the coming years and working with you to ensure that the LMA delivers on its core objectives of improving liquidity, efficiency, transparency and sustainability in the primary and secondary syndicated loan markets in EMEA.
One of my personal commitments is to have regular communication with you all to provide even greater transparency about how the LMA operates and the work we are undertaking on your behalf. I’ve already spoken with many members and received valuable input about what you would like to see more of – and less of – from the Association. I am determined to sustain and deepen this engagement, and to open up new channels for two-way dialogue. If we want to represent our members effectively, we must keep listening to you.
Having only been appointed in September, I must give great credit to the LMA team and members for the Association’s many achievements this year.
Numbers tell their own story, so I wanted to share the infographic below, which points to the strength of our members’ engagement with the LMA as well as its importance as a trusted and respected voice for the loan market. With over 850 members across 69 jurisdictions and every corner of the market ecosystem, the scale of who and what the LMA represents is one of the key reasons that I joined.
Sustainability
- We began the year with the publication of our strengthened Green, Social and Sustainability-Linked Loan Principles and supporting Guidance. This was swiftly followed by the release of our award-winning Model Provisions for SLLs and accompanying term sheet. Together, these resources provide borrowers and lenders with useful tools that support the growth of the SLL market.
- Our thought-leadership directory continued to expand in 2023, focusing on sustainability in aviation, leveraged finance, the mid-market, shipping and social housing.
- The year concluded with our flagship Sustainable Finance Conference, drawing together over 700 delegates from around the world, uniting behind an agenda covering the broad spectrum of sustainability issues, beyond greenhouse gas emissions.
IBOR transition
- We have continued to be pivotal in supporting the loan market through the IBOR transition. The market reached significant transition milestones in 2023 without suffering any disruption, including the landmark cessation of USD LIBOR on 30 June.
- We have continued to inform and educate the market, as well as producing Risk-Free Rate (RFR) documentation that facilitated options including term rates. We would like to thank the committees and working groups that have been closely engaged in supporting these efforts and providing feedback.
- We have continued our engagement on currency RFR Working Groups, including the Euro Working Group and South African MPG, working closely with regulatory bodies to support the wider risk-free rate transition and receiving recognition for our work across EMEA.
Advocacy
- We have continued our advocacy work across many fronts in 2023 all to protect and promote our loan markets. There have been too many to list them all here, but with the participation of our working groups and the broader membership we have remained the strong and correct platform to represent our markets. Moreover, as you will have seen recently, we have added more direct viewpoints and thought leadership giving you all a greater tool kit to consider the direct impact on your activities.
- The IOSCO consultation on leveraged loans and CLOs has been a significant piece of work for us over the last quarter with us submitting our response this week. This has not been without challenge given the range of questions posed and the broad stakeholder groups who responded reflecting their firm wide view. Thank you everyone who contributed allowing us to craft the appropriate response back to IOSCO.
- The final NPL directive showed how persistent lobbying was able to remove some of the more egregious initial proposals. Notwithstanding that, the final legislation still poses some issues for members which the LMA is helping them navigate, through guidance and standard reporting templates. We are publishing our first piece of work in December with more to follow at the member state level in 2024.
The EMEA market has been resilient under challenging conditions over the last two years, but it is changing. The growth of private credit funds over the last 12 months has been remarkable – and high profile. This was reflected at our recent private credit event, which was fully booked within 24 hours of registration opening building up a large waitlist. Over 400 people ultimately attended.
I mentioned some Google search data in my remarks at the event that may surprise members. Search for the LMA and you get an impressive 267 million results. Searches for COP28 and Taylor Swift yield 1.4 billion and 930 million results respectively. But search for private credit and you get a staggering 2.42 billion results.
Private credit is by no means a new asset class, but this degree of interest is unprecedented, and I believe the shift in the structure of debt finance it has driven is now permanent. The LMA will work to represent the interests of all market participants, including our private credit fund members, and to lead the discussion about growing institutional participation.
Financing the transition to net-zero has been high on the agenda at COP28 and sustainable finance will continue to be a core part of the LMA’s work in 2024. This is a priority for the financial markets as a whole, and we will continue to strengthen our collaboration with our partner industry associations to drive greater impact.
Our three-year strategy
The LMA ends 2023 in a position of financial strength. This allows us to invest in accelerating progress towards our goals over the years ahead, as well as to build a robust foundation that enables greater operational leverage.
At the Board Meeting in November, I presented my 3-year strategy for the Association. This was built around a clear vision and mission.
As I mentioned, I believe it is vital that the LMA represents all members from all verticals across the entire loan market ecosystem. I will be looking to grow membership, especially in the buy-side segments that are currently underrepresented, and to ensure increased engagement.
Events and training are a core part of our value proposition, but it is clear to me that we can go much further on this front.
There is also a significant opportunity for us to enhance our digital offering, delivering more engaging and relevant content via this channel. One of the highlights of this will be the launch of the LMA Academy, which will house much of our digital learning and training content.
The integration of technology into our market will of course continue to be a broader priority for the LMA. There are several streams of activity underway to support members’ collaboration with LoanTech providers and showcase use cases. LMA.Automate will also be a part of this digital strategy.
As you can see, I believe in the LMA and am ambitious for its future. Change can be difficult, but it is essential to achieving meaningful goals. As John D. Rockefeller said, we shouldn’t be afraid to give up the good to go for the great. I want us to work together to elevate the LMA’s position as the trusted, authoritative and respected voice of the loan market.
As I mentioned, though, I will need your input and contribution too, if we are going to be successful. My ask for you over the rest of the year is that you reach out to me with your LMA Christmas Wish List and tell me the one thing you are looking for from the LMA to make the loan market better. Please click on this link to let me know. I will review every response and reply individually, if you choose to provide your name.
Finally, let me wish you and your loved ones a very happy holiday period and all the very best for 2024 on behalf of everyone at the LMA.
I am looking forward to working with you all.
