Atlantic Conferences - Program - New York City 2007

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"The Symposium allows us to connect with our existing Limited Partners and also to develop relationships with prospective investors. It's an efficient venue for us to meet people from all over the world. Equally important, the data that we obtain at the Symposium enables us to monitor pricing trends for capital in the marketplace and also to provide a comprehensive perspective on the market to current and prospective investors. It's the one conference we wouldn't miss."

Tom Hiatt, Founding Partner, Centerfield Capital Partners

DAY 1

Tuesday, April 20

_________________________

7:45 a.m. - 8:15 a.m.

REGISTRATION & CONTINENTAL BREAKFAST

8:15 a.m. - 8:20 a.m.

CHAIRMAN'S WELCOME & OPENING REMARKS

8:20 a.m. - 8:30 a.m.

CHAIRMAN EMERITAS' WELCOME & OPENING REMARKS

Closing Deals After the Freeze:

The Money is Back

8:30 a.m. - 9:15 a.m.

DATA SPONSOR: BABSON CAPITAL

ATLANTIC CONFERENCES MARKET SURVEYS 2010

Atlantic Conferences’ 16th annual informal, high-level survey of the traditional mezzanine markets is complemented by a Standard & Poor's Leveraged Commentary & Data Survey. Listen as both speakers explore current deal terms and deal trends.

SURVEY I: 16th ANNUAL ATLANTIC CONFERENCES MEZZANINE MARKET SURVEY

Preston G. Walsh

Partner

PNC Mezzanine Capital

SURVEY II: STANDARD & POOR"S LEVERAGED COMMENTARY & DATA SURVEY

Robert Polenberg

Director

Standard & Poor's Leveraged Commentary & Data

9:15 a.m. - 10:15 a.m.

THE STATE OF THE MARKET

In November 2009, the National Association of Business Economists reported that a panel of 48 member economists declared that the recession had ended, that employment gains would begin in the second quarter of 2010 and that GDP growth for the year would be sufficient to recover losses from the recession with output returning to an record high by the end of the year. Coming out of the first quarter of the year, unemployment remains at record levels. Business performance appears stable, but signs of growth are fleeting. Leverage is available, but not plentiful. While private equity funds have plenty of capital to invest, what will it take to get the M & A markets back into gear? Join us as we kick off the Symposium for Mezzanine and Middle Market Finance ’10 and bring 17 years of Symposium history to bear as we examine the challenges to be faced as we emerge from the “Great Recession”.

• How have junior capital investors spent their time since Symposium 2009?

• After all but shutting down, what are the alternative providers doing?

• Are senior lenders back and what could cause disruption?

• Is there capital for funds and, if so, where is it going?

• Are we in for a double-dip or just a slow recovery?

10:15 A.m. - 10:45 A.m.

NETWORKING & REFRESHMENT BREAK

10:45 a.m. - 11:30 A.m.

SENIOR LENDING: WHO'S WILLING TO PLAY?

An estimate provided by Standard & Poor in an issue of The Deal had 2009 leverage loan volume at $76 billion, with a doubling of volume based on Q4 2009 activity expected for 2010 as M & A volume rebounds. But, much of the volume to date had been in the larger end of the market, with the demand in the smaller end of the middle market being met by a very selective group of regional banks and finance companies. Because of conservative practices before the fall, traditional banks with an appetite for cash flow lending may be in a better position than the unregulated and more aggressive BDCs and lenders who had been supported by hedge funds and CLOs who may find themselves without access to capital for the foreseeable future. At the same time, concerns over how the economy recovers, the impact of another oil price spike or further deterioration in real estate portfolios could keep banks on the sideline. While lower leverage, historically wide credit spreads and limited competition make it an attractive time to be in the leveraged lending business, the question is: Who is able and willing to lend?

• How will the small end of the middle market perform versus the larger market as the capital markets rebound?

• What is the outlook for leverage, pricing and availability for the coming year?

• Who will lead in the recovery, the traditional banks or the non-bank lenders?

11:30 a.m. - 12:15 P.m.

PRIVATE EQUITY: HOW WILL THE MONEY BE PUT TO WORK?

Record levels of uninvested capital; portfolio companies positioned for sale after a year focused on right sizing operating and balance sheet structures; increasing signs of renewed interest in leveraged lending by senior debt providers. By all accounts, 2010 should be a record year for M & A activity. The need to deploy capital and provide limiteds with returns before the next fund is raised should combine to bring buyers and sellers back to the market. What will it take? What could derail it? An economic recovery would translate into earnings growth given 2009’s cost reductions providing lenders, sellers and investors with the confidence to proceed. A stalled recovery might shut down lending and the M & A pipeline.

• How are PEGs thinking about the market?

• What do capital structures look like?

• Are there strategies for maximizing returns in a low leverage environment?

• How does a sponsor choose between second lien, traditional mezzanine, more equity and stretch senior?

12:15 p.m. - 2:00 p.m.

LUNCHEON

Luncheon Address:

TBD

2:00 p.m. - 2:45 p.m.

TRADITIONAL MEZZANINE: ARE TIMES REALLY AS GOOD AS EVERYONE SAYS?

At Symposium ’09, the traditional mezzanine practitioners were celebrating the “Year of the Mezzanine Fund”. Hedge funds had withdrawn to meet redemption calls; BDCs lost access to investable capital with the decline in the public markets; senior lenders stopped lending as the worst of the credit freeze set in. Mezzanine funds with capital anticipated the return of low leverage and improved pricing—including the return of warrants—similar to the 2002-2003 period. Unfortunately, the euphoria gave way to the reality of the recession’s impact on portfolio performance. Economic uncertainty caused sellers to pull back and the M & A markets to stall. Senior and mezzanine lenders, along with equity sponsors, engaged in portfolio management. By late fall, many portfolio issues were addressed, the economy showed signs of stabilizing, a select group of senior lenders were offering minimal leverage, the markets started to open, inquiries for mezzanine began to rise. And then, providers of alternatives to mezzanine began to appear.

• What are mezzanine funds doing now?

• Where is pricing, where is it headed and what is happening with leverage?

• With return of alternatives, how are traditional mezzanine funds responding?

• Have mezzanine strategies evolved over the past 12 months?

2:45 p.m. - 3:30 p.m.

ALTERNATIVE FINANCING STRUCTURES: IS MEZZANINE DEBT TAKING A BACK SEAT?

It’s the Golden Age of Mezzanine –or at least it’s supposed to be. With senior debt available only for the best credits (and then at historical low multiples), it is difficult, if not impossible, to get any kind of financing done without a tranche of junior capital. But, mezzanine providers are often perceived as more eager to hold on to their capital then to invest. Some borrowers believe that when mezzanine is available, their rates of return are just too high. As a result, the door is opening for a resurgence in second lien loans and unitranche debt which may be poised to take over mezzanine as the leading junior capital alternatives. Four experienced junior capital providers discuss why their second lien and unitranche products are superior to traditional mezzanine and the conditions where private equity firms should consider using these alternative structures.

• Who is providing alternative junior capital and has anything changed?

• When does a uni-tranche loan make sense and when does it not?

• What is the role of second lien debt and how is it used effectively?

• Who is providing capital to alternative providers and is it different this time?

3:30 p.m. - 4:00 p.m.

NETWORKING & REFRESHMENT BREAK

4:00 p.m. - 4:45 p.m.

BUSINESS DEVELOPMENT CORPS REVISITED: WHY HAVE SOME THRIVED AND SOME NOT SURVIVED?

In 2004, fourteen BDCs had filed with the SEC for public offerings on the long time success of Allied Capital and American Capital Strategies. Potential limited partners questioned the viability of the traditional mezzanine fund model and traditional mezzanine fund managers wondered what all the new entrants would mean for business. While the majority of applicants never succeeded, those that did changed the nature of middle market finance offering flexibility up and down the balance sheet. The public market’s embrace of the BDC model lead to year over year success in stock offerings to support aggressive capital deployment—until the market crashed in 2008. While Allied was acquired, American Capital is attempting to restructure and a number of smaller BDCs are quietly working their portfolios in hopes of an opportunity for future liquidity, several BDCs thrived and have taken advantage of the current market environment to acquire their former competitors and raise additional capital in order to expand their platforms and their capital base. This panel represents the “new” leaders in the field. Listen to what they have to say about their strategies and their outlook for the future.

• Why have some succeeded while others have not?

• Is there a "right" model for a BDC?

• How does a public vehicle fit with a private investment strategy?

• What strategies have the support of public markets?

4:45 p.m. - 5:30 p.m.

SPOTLIGHT SESSION:

A PUSH TOWARD TRANSPARENCY: THREE REQUIREMENTS THAT WILL CHANGE HOW FUND MANAGERS DO BUSINESS

In the wake of aggressive practices by some Wall Street money management firms prior to the financial melt down, over-reaching behavior by a number of high profile private equity fund managers and the pay-to-play scandal embroiling the fund raising markets, a regulatory backlash aimed at managers of both public and private investment companies resulted in a push toward increased transparency and accountability. During 2010, private equity funds will most likely be required to be listed with the SEC as registered investment advisors; traditional partnership terms for new funds will change to reflect the recently issued limited partner friendly guidelines provided by the Institutional Limited Partners Association (ILPA); unknown risks associated with hiring fund raising agents and their constraints in dealing with public pension plans will impact the fund-raising process. Have a few “bad apples” brought an unnecessary and overwhelming response from outside the industry? What does this mean for traditional managers? All result from the demand for increased transparency; all carry a real dollar and administrative costs to GPs. Is there any clear guidance for fund managers in satisfying the SEC? The ILPA members have created guidelines; how broadly will they be instituted? Will GPs who need agents for overall fund raising be shut out from certain state funds? How can middle market and smaller funds comply without undue expense and time? Join us as this panel of leading security and private equity lawyers explain what the changes are and what they could mean for your current practice and your next fund.

4:45 P.M. - 5:00 P.M.

BECOMING A REGISTERED INVESTMENT MANAGER

• What is required?

• What does it cost?

• Are there exceptions based on assets under management?

5:00 P.M. - 5:15 P.M.

COMPLYING WITH THE ILPA GUIDELINES

• What are the provisions?

• Who are the ILPA members?

• How uniformly are they being applied?

5:15 P.M. - 5:30 P.M.

IMPLICATIONS OF THE PAY-TO-PLAY SCANDAL

• What is being implemented as a result?

• Who does it affect?

• What are the implications for using agents and for fundraising?

5:30 p.m. - 7:00 p.m.

ANNUAL INDUSTRY COCKTAIL RECEPTION