Sector developments and company hires

Survey shows rise in ESG disclosure, investing activity
ESG disclosure and investing activity within structured finance grew by 15% over the last two years, according to the SFA’s 2^nd Biennial ESG Market Sentiment Survey: Securitisation Issuer and Investor Perspective. The findings suggest that issuer disclosure is growing thoughtfully, with 40% of respondents reporting that they provide some ESG disclosure and another 40% seriously considering it. From an investor perspective, disclosure of collateral-level information is a fundamental imperative.

ESG disclosure in the structured finance market has nevertheless begun to incorporate a broader range of asset classes, including RMBS, CMBS, auto, personal loans, data centre, PACE and railcar collateral.

The top ESG integration motivator for issuers continues to be ongoing demand from investors, according to the SFA survey. Meanwhile, ‘client demand’ and ‘alignment with firm values’ continue to be the top ESG motivators for investors, with ESG investment strategies correspondingly shifting to meet changes in underlying client demand.

For its 2022 survey, SFA polled 55 structured finance market participants on the use of ESG disclosure metrics in investor reporting, due diligence and client investment alternatives. Respondents represented a diverse range of participant types and market sectors.

In other news…

EMEA
Scope has promoted Florent Albert to senior director and head of the structured finance commercial real estate team. Based in Berlin, he was previously director for structured finance at the rating agency, which he joined in October 2017. Before that, Albert worked at Barclays and BGL BNP Paribas.

Five sponsors prep FIVE CMBS
The first US conduit CMBS 2.0 transaction to be collateralised solely by loans with five-year terms has hit the market. Dubbed FIVE 2023-V1, the US$765.5m deal also counts five sponsors – Bank of Montreal, Barclays Capital Real Estate, Citi Real Estate Funding, German American Capital Corporation and Goldman Sachs Mortgage Company.

The transaction is backed by 26 loans secured by 43 properties located throughout 18 MSAs, of which the three largest are New York (accounting for 15.1%), Los Angeles (13.5%) and Long Island (9.8%), according to KBRA. The pool has exposure to all major property types, with five types representing more than 10% of the pool balance: office (29.1%), retail (26.5%), industrial (14.1%), multifamily (12.5%) and mixed-use (11.3%). The five largest loans - which include Brandywine Strategic Office Portfolio (9.8%), 3PL Distribution Center (8.7%), Sentinel Square II (8.4%) and Blue Oaks Town Center (7.4%) - represent 44.1% of the initial pool balance, while the top 10 loans represent 68.9%.

North America
Jim Stehli has joined Polen Capital as co-lead of its CLO platform, based in Boca Raton. Stehli was previously md, head of US CLO and securitised products trading at Mizuho in New York, which he joined in April 2014. Prior to that, he worked at CRT Capital Group, UBS, PaineWebber, Kidder Peabody and JPMorgan.