Data Committee

This column highlights the hard work and dedication of SFNet committee volunteers. Here we speak with Lawrence Chua, managing director, Ares Management, and chair of SFNet’s Data Committee.

The Data Committee assists in the development of SFNet’s data and research initiatives, including the Market Sizing & Impact Study and the semi-annual Market Pulse report, and provides insights, analysis, and development of the SFNet ongoing Annual ABL & Factoring Surveys in addition to the SFNet Quarterly ABL reports.

TSL: Please provide us with some background on your career. Chua: I started my career at GE Capital out of grad school and joined a leadership training program there. I held a variety of roles in risk management and finance at different business units such as GE Commercial Finance, GE Real Estate, GE Consumer Finance as well as spending time at the GE Capital Office of the CEO. At the time, GE Capital was a powerhouse in the world of credit and was an ideal place to learn how to be a lender. I was fortunate enough to gain exposure to the major “food groups” within the world of credit: commercial, consumer and real estate. GE was a leader in many areas but also a very big place at the time, and I ultimately found that I wanted to do something more entrepreneurial.

I went from being an investment professional at GE Capital to bootstrapping an internet-based business in New York City. I was living in Manhattan at the time, and Fresh Direct, an online grocery retailer, had just started gaining traction at that point. These days, it doesn’t sound revolutionary to order groceries online, but in the early- to mid-2000s that was mind-blowing to me, or maybe I’m easily impressed. The business I started was a variation on the general theme of using the internet to serve a basic recurring need. In my case, it was dry cleaning and laundry services instead of groceries. I outsourced the physical cleaning part, and my focus was really on owning the web-based platform and the customer relationships, so somewhat like a lot of the platforms we see today like Uber and Airbnb. I ended up selling the business to a strategic buyer.

After a few years as an entrepreneur, I found that I missed the world of finance and ended up joining a startup credit fund as employee number three. This experience allowed me to combine my financial services experience and my entrepreneurial mindset, which was fantastic. After some interesting times during the Great Financial Crisis, the firm’s primary investment vehicle became a publicly traded BDC where I was an officer, head of underwriting and member of the investment committee.

I had an opportunity to join a new group within Ares Management about seven years ago and am currently a managing director in the Credit Group there. Ares acquired two independent asset-based lenders, and I joined shortly after they made those acquisitions and have had the opportunity to help drive the growth of that platform. I’ve worn several different hats since joining Ares and have been involved in all facets of the investment process, including underwriting, portfolio management, originations and investor relations. Most of my time these days is spent on originations and new product development.

For someone who’s reading this and may want to join SFNet’s Data Committee, how would you describe it to them?

The SFNet Data Committee is a great opportunity to step back and view the secured lending space from a more macro level. It’s easy to get caught up in your day-to-day activities and things specific to your organization, such as portfolio matters or a specific transaction, but zooming out can be very informative.

The Data Committee allows one to step back and understand who the players are in the industry, what are industry trends, what is happening in the industry and whether those align with what’s happening within your own organization or if you’re seeing something different. I think that’s very interesting and worth learning about, and helps you do your job better at your own organization. To me that was the greatest benefit from a personal standpoint of joining. The other benefit is that through the Data Committee, I get to work with some great people in our industry.

I was on the Committee for several years, and then I was the vice chair and then chair starting in 2022. So, this is my second year as Chair. We’d love to get more Committee members and entities reporting on a quarterly and annual basis to help improve the quality of the information. I’m happy to speak to anyone interested in joining the Committee or interested in reporting and gaining access to information provided to reporting members only.

What does the Committee do?

The Committee is tasked with gathering and presenting useful industry information to SFNet members. It is one of the value-add aspects of being an SFNet member as we are the best source of information for our industry.

For most people involved in the Committee, the biggest deliverable is the SFNet Quarterly and Annual Reports that are released. Historically, it had been only annual for factoring, but we’re working on increasing the frequency of the factoring reports.

For most people who are getting involved, helping with that analysis is the main point of involvement. Before every quarterly or annual report is released, a draft is prepared and aggregated by SFNet’s external consulting firm, Keybridge, LLC, and then circulated. I also want to point out that committee members, myself included, do not have any insight as to specific numbers that other SFNet members may report as we make it a high priority to preserve confidentiality. We only look at aggregated or anonymized information.

Once the Committee gets a report draft from Keybridge, the external party that helps compile the responses and prepare our reports, we try to get to the ‘why’ something is happening. For example, in a given quarter, we might observe a change in credit line utilization or growth in outstandings or commitments. We dig into why we are seeing certain trends, and what’s driving it. That discussion tends to be very interesting as we have a great group within the Data Committee.

The Committee has a good mix of bank and non-bank members and members from institutions of varying sizes, too. So, everybody brings a different perspective, which is interesting. There’s a lot of sharing of ideas and ultimately our goal is to land on central themes for a quarterly or an annual report. Keybridge will then take notes, consolidate our key thoughts, and then that is what will go into the final report that is released to our members.

SFNet member companies that provide reporting on a quarterly or annual basis receive an enhanced report. They get additional insight rather than the high-level, general information available to non-members.

Beyond the regular reporting cycle, there will be other, I call them special projects, that may come up that certain members would get involved in as well.

How much time is involved if you’re a Data Committee member?

It varies, but I would say for most members, involvement might be a few hours a quarter. Meetings tend to happen quarterly. The idea is people get the draft report, and the expectation is that we have a productive conversation. Everybody takes the time to read the report, come up with their own thoughts, and then share those thoughts on our group call. While the group call might only be an hour and a half, there is some prep time involved, and I think that’s really where we’re looking for our members to be thoughtful and think about what they’re seeing and be able to share that with others on the Committee.

One of my favorite parts of being involved in this Committee is hearing the different perspectives and thoughts from industry leaders. People are in different subsegments

SFNet Membership Committee Members

Chairperson: Lawrence Chua, Ares Management LLC

Vice Chairperson: Barry Bobrow, Regions Business Capital

SFNet Staff Liaison: Aydan Savaser, Secured Finance Network

Chris Bauer, Truist

Stephen Beriau, Eclipse Business Capital

Miin Chen, Siena Lending Group

Michael A. Fortino, White Oak Commercial Finance, LLC

Jeffrey K. Goldrich, SLR Business Credit

Tighe Ittner, Truist

Laura Lynn Jakubowski, Goldberg Kohn Ltd.

Terry M. Keating, Access Capital, Inc.

David Koshenina, Wells Fargo Commercial Capital-Lender Finance

Catherine Levine, Regions Business Capital

Donald B. Lewis, Eastern Bank

Adam Moss, Bank of America Business Capital

Mark Jeffrey Ruday, Newpoint Advisors Corporation

William A. Stapel, Fifth Third Bank

Jonathan T. White, Citizens Bank

Danielle Nicole Williams, Fifth Third Bank

Chris Bauer, Truist Securities

What do you like about being on the Committee?

Serving on the Data Committee has allowed me not only the opportunity to connect with other ABL professionals in the industry, but also provides a forum to discuss real-time developments and insights into the opportunities, challenges, and trends within the ABL market.

What would you say to someone who is interested in joining the Committee next year?

It is a great way to get more connected with professionals across both the bank and non-bank ABL market while also staying up to date with current market trends and developments. Additionally, as we continue to increase the breadth and depth of committee members across both institutions and job functions, it improves the quality of information and insight that we can provide.