Reed Smith doubling down on esoterics

Top structured finance law firm Reed Smith has a developed esoteric practice, but is looking to beef up even more, says newcomer Jeffrey Stern.

“This is one of the focuses within the structured finance practice, and I expect to see significant growth in our activity in these asset emerging classes. There’s going to be a significant push here,” he told SCI.

Stern joined the firm three weeks ago from Winston & Strawn as a partner in the Financial Institutions Group.

He mentions oil and gas financing and also CFO CLOs as likely growth areas.

 The strength of the firm in leasing transactions was a one of many inducements to join. “A lot of funky esoteric deals will have a complex leasing component, and having strong leasing support at Reed Smith is a terrific advantage. This is going to be huge for a lot of my clients,” he says.

Reed Smith is also strong in transport and insurance related asset securitization, both of which be of benefit to his existing clients. The esoterics area of the practice also includes litigation funding, equipment loan finance, consumer loan finance, music royalties and specialty finance.

Private credit will continue to play a robust role in the structured finance market and one that is only likely to expand even further, Stern believes.

The reintroduction of operational risk within structured finance is increasing, he adds, and this requires specialized skills and also heightens barriers to entry.

“In general asset managers have become increasingly active. Added operational risk creates higher barriers to entry so that it is easier both to get and to preserve reasonable returns on investment,” he says.

The oil and gas market, CRE CLOs and vessel financing are a few examples of asset classes which require enhanced operational expertise from sponsors and in which there are significant opportunities to introduce additional liquidity.

Stern spent nine and a half years with Winston & Strawn, most latterly as co-head of the structured finance practice. He has over 30 years of experience in structured finance and derivatives, including working extensively on Latin American and Caribbean cross-border assets and cash flow financings.

Simon Boughey

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