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Succession: ABL Industry Needs a Plan
By Charlie Perer
The ABL industry is struggling with succession challenges. Founders are synonymous with their firms, yet many lack succession plans despite good health and changing industry dynamics. The generational shift demands innovation and client-centric approaches. Planning and communication are crucial. Unlike TV drama, ABL leaders must ensure smooth transitions to secure their legacies and firms’ futures amidst industry upheaval.
Succession is an American satirical comedy-drama television series centered around the Roy family, the owners of global media and entertainment conglomerate Waystar RoyCo. The premise is that the patriarch, Log Roy, has experienced a decline in health and his four children begin to prepare for a future without their father and vie for prominence within the company. Apply this to the ABL industry and many of the leading bank and non-bank groups are synonymous with their founder(s) who have yet to set a succession plan. In many cases it’s hard to separate the two. It’s easy to understand as, for many of these entrepreneurs, lending is and has been their life, and their business and personal relationships are intertwined. Thanks to modern medicine, many are also in good health so it’s understandable to think they might work for a while. Ironically, this has potential to create a conflict as the next generation gets impatient. There is a generational change happening now that encompasses everything from where employees work, how they work and technology change, among other things. At some point though this industry is going to need a succession plan as the industry is going through a sea of change.
Succession dynamics will always remain, however, the difference now is that there is much more capital and control from sponsors and asset managers, etc. that will cause the new management to be under more pressure. They will have to stick to basics or they will fail. Change is never easy and often comes at times of significant industry and technological change like we are dealing with now. Many of today’s leaders took over the reigns 20 to 30 plus years ago during a period of immense change, which included the formation of the first wave of sophisticated ABL platforms such as Foothill, GE, CIT and Fleet, among many others. As a result, today’s leaders came of age in a different time, lending climate and even culture. What also should be said is that the historical view of the borrower as a debtor is being re-imagined in today’s climate. This is due to the multitude of options available today and also more layers involved, ie investment banks, FAs, consultants, etc. to actually reach the client. We are entering a different lending climate where the customer experience and process matter more than ever as the borrower’s options are greater than ever.
Please click here to continue reading the article.
Succession is an American satirical comedy-drama television series centered around the Roy family, the owners of global media and entertainment conglomerate Waystar RoyCo. The premise is that the patriarch, Log Roy, has experienced a decline in health and his four children begin to prepare for a future without their father and vie for prominence within the company. Apply this to the ABL industry and many of the leading bank and non-bank groups are synonymous with their founder(s) who have yet to set a succession plan. In many cases it’s hard to separate the two. It’s easy to understand as, for many of these entrepreneurs, lending is and has been their life, and their business and personal relationships are intertwined. Thanks to modern medicine, many are also in good health so it’s understandable to think they might work for a while. Ironically, this has potential to create a conflict as the next generation gets impatient. There is a generational change happening now that encompasses everything from where employees work, how they work and technology change, among other things. At some point though this industry is going to need a succession plan as the industry is going through a sea of change.
Succession dynamics will always remain, however, the difference now is that there is much more capital and control from sponsors and asset managers, etc. that will cause the new management to be under more pressure. They will have to stick to basics or they will fail. Change is never easy and often comes at times of significant industry and technological change like we are dealing with now. Many of today’s leaders took over the reigns 20 to 30 plus years ago during a period of immense change, which included the formation of the first wave of sophisticated ABL platforms such as Foothill, GE, CIT and Fleet, among many others. As a result, today’s leaders came of age in a different time, lending climate and even culture. What also should be said is that the historical view of the borrower as a debtor is being re-imagined in today’s climate. This is due to the multitude of options available today and also more layers involved, ie investment banks, FAs, consultants, etc. to actually reach the client. We are entering a different lending climate where the customer experience and process matter more than ever as the borrower’s options are greater than ever.
Please click here to continue reading the article.
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