What exactly is Leveraged Finance, the finance sub-sector in which the Structured Lending (SL) or Structured Acquisition Finance (SAF) department are active? We asked Femke Schep, Head of Structured Lending at ING, to take us through her world!
Femke Schep, an Industrial Engineering and Management graduate, fell in love with banking many years ago, when she completed an internship with ABN AMRO. After multiple positions within ING and other banks, Femke took on the role of Head of the Structured Lending team at ING. She is leading a team of 18 people, focusing on her team’s development, acting as a sparring partner for transactions, and helping her team to support clients.
Tailored financing structures for clients
Perhaps the most notable aspect about these departments is the complex financing structures that they provide for their clients. Unlike a regular loan from a bank, these teams create a long-term financing package for their clients, tailored to their ambitions and plans, and involving different financing elements in terms of pricing, terms and conditions, tenor, and more!
“Let’s say a company, usually in the mid-corporate segment, has a financing need related to an ‘event’. This can be an acquisition, a CAPEX plan, or building a new sustainable factory. They come to us because they need financing to make their ambitions and plans happen.
Our clients seek an optimal, personalised level of commitment, flexibility, and costs. If you want a lot of flexibility, or a lot of commitment, that will mean higher pricing. Every client has different needs. Some want more flexibility, others prefer lower costs. We structure a package of multiple facilities in such a way that it suits our client’s requirements, but is also acceptable for ING. It’s like solving a puzzle!”
Leveraged Finance is all about advice and services. Both departments work with Dutch companies and a variety of sectors – this means that their teams consist of generalists who don’t specialise in any particular sector.
“This makes the work really dynamic. One day you could be working for a client in IT, and another project will be with a client in construction or wholesale “
The main challenge of your work is to get to the core of a transaction, from all the information that you get from your client.
Your working day depends on where you are in the process with various clients. You work wtih more clients in parallel transactions, meaning that with some you will be at the beginning of the process, and with others closer to the end.
Femke explains the work as consisting of three important aspects:
Working in Leveraged Finance within ING means you can focus on Structured Acquisition Finance (SAF) or Structured Lending (SL). Now, let’s dive into what differentiates these two departments from each other: the types of clients they work with!
The Structured Acquisition Finance (SAF) department
The SAF department is perfect for someone who wants to focus on Private Equity, or is interested in pursuing it later. If you are ready to deal with professional, demanding firms that you build a long-term relationship with, the SAF department is definitely the right fit for you!
“In the SAF department, we work with over 80 Dutch and International Private Equity firms. They come to us because they want to invest in a company and are looking for financing from us. Or perhaps they have a buy & build strategy for an existing portfolio company, or they just want to optimise their financing structures to create the largest return on their equity.”
In the SAF department, it’s a lot about relationship building. Moreover, because the team works with established Private Equity firms, the processes are shorter thanks to the professionalism of these firms. Overall, the process is high-speed, straightforward and with more turnover, but less flexible and less creative.
The Structured Lending (SL) department
The SL department is best suited for professionals who want to work with a variety of entrepreneurs, founders, and family businesses that have a long-term vision for their businesses. If you are looking for a diversity of financing structures, as well as more space for flexibility and creativity, then SL is the place to be!
“Within this department, we offer the same services as SAF, but we work with family businesses, founders, etc. Hence there is a broader variety of clients and therefore a lot of different financing structures for different moments. Such as an acquisition, a CAPEX program to make their company more sustainable, etc.”
The SL department has more diverse clients and financing structures. That also means that the processes take more time and are more unpredictable sometimes, depending on how prepared their clients are and what information they can already provide. Working with a family business means that you get the chance to guide them through the whole process, making your job challenging and exciting!
So, why would you choose Leveraged Finance?
You might think: why would I go for Leveraged Finance, and not the M&A department, for instance?
Femke believes these teams’ dynamism and diversity is what makes them a very good start for your career in Finance. Moreover, you deal with more transactions (15-20) than in a typical M&A department, which means that you have to get to the core of a business in a very short amount of time.
“We’re an ambitious team, very focused, that gets to the core of a business very quickly. Our work is demanding, but it’s also why you have a steep learning curve.
Working with us means discovering multiple industries and financing structures, making it a very good basis for understanding and analysing businesses, as well as different financing structures.”