Commercial Factor Q&A: Jeffrey Whaley Discusses New Role at Haversine Funding
Jeffrey Whaley joined Haversine Funding in May as the company’s new CFO. A financial executive with more than 20 years of experience, Whaley is entering the alternative financing sector from the investment banking side of the world, having previously served as a senior vice president with Goldman Sachs. In an exclusive Q&A with Commercial Factor, Whaley spoke about what he will bring to his new role as well as his insights on providing working capital.
In the press release announcing your new role, you said that “the current environment is at an inflection point.” What did you mean by that?
Jeffrey Whaley: I think the best way to expound upon that remark is to say, we live in interesting times. The economy is emerging from the distress caused by the global pandemic and no one really has a “guidebook” to know what a reversion to norms looks like. We don’t have much in the way of context to frame what doing business looks like for the near term. A reasonable assumption is that many small and medium-sized businesses will come out of the pandemic requiring financing and it’s going to be up to players within the specialty finance industry to find the best ways to meet the needs of our clients and investors. The ability or failure to adapt during this time of transition will dictate success.
What types of opportunities are you expecting to develop in this changing marketplace and how do you hope to help Haversine Funding capitalize on them?
Whaley: Related to my answer to the first question, I think we are going to find that flexibility is at a premium, especially when it comes to our clients, borrowers and investors. To a large extent, we will have to simply be attentive to the market and agile enough to respond to what is asked and needed.
In the same vein, as a financial leader for Haversine Funding, what are some newer challenges in accounting, operations and/or compliance that you expect to face in the years to come?
Whaley: Interestingly, I think the challenges in accounting and operations are very familiar and cliche. We have to be able to grow and scale without compromising our controls and the quality of our due diligence and reporting. There will always be the looming challenge of potential new regulatory hurdles.
Regardless, when it comes to back-office operations (accounting included), the challenge is consistency: How do we grow while still providing our clients and investors the best execution and the most transparency? That comes from a mix of utilizing the best technology and human capital.
How did you come to join Haversine Funding? What was the hiring and interviewing process like, particularly during a global pandemic?
Whaley: In my previous role at Goldman Sachs, I worked primarily with the merchant banking division. The private debt and equity spaces have always been a natural attraction for me. With Haversine Funding, I was drawn to the prospect of changing gears from a large investment bank to a smaller firm still within the private debt and equity market. Obviously, given the pandemic, the bulk of the interviewing and meetings were done remotely. I’ve traditionally disdained video interviews, but they’re a necessary evil that I’ve learned to live with over the past year. In my discussions with Stan Vukmer and Gen Merritt-Parikh, I was blown away with their energy and expertise. That enthusiasm came through clearly regardless of our medium for communications.
What are some lessons you learned during your previous experiences that will influence your approach in this new role?
Whaley: I’ve been fortunate enough to have worked in a variety of settings within the financial services industry. In my experiences so far I keep coming back to the same two maxims:
Always be transparent with your clients and investors.
Always be mindful of your cash/liquidity position.
Today’s investors are more sophisticated than they’ve ever been. Right now, investors have an incredible breadth of options for deploying capital. Our commitment to transparency with investors isn’t just the right thing to do — it’s an important way to differentiate within the market.
Having witnessed the recessions of the early aughts, the Great Recession and now the COVID-19 pandemic, history is riddled with financial services firms that failed due to liquidity crunches, not overall business failures. An effective manager can never assume that their sources of capital are permanent. As managers, we have to be vigilant to the point of paranoia to ensure that our cash position is strong, not just to weather downturns but to take advantage of opportunities in the market.
Haversine Funding obviously does more than factoring, but what is your experience with the factoring industry?
Whaley: Honestly, I’ve had limited direct experience in the factoring industry to this point in my career. The concepts are not too foreign from my experience in the larger private debt markets, but factoring definitely has its own nuances and nomenclature that I’m working to learn. I’m fortunate to be surrounded by a very strong team at Haversine Funding to assist in my continued growth.
What is your outlook for working capital providers for the rest of 2021 and how do you think the market will evolve into 2022?
Whaley: I know enough to know that I’m probably out of my depth with this question. Regardless, I would guess that given the massive injections of stimulus provided by the federal government, combined with relaxation of COVID-19-related lockdown, we are likely going to see an explosion of consumer demand in the short term. The increased demand should logically lead to the resumption of businesses that have been closed or shuttered. Getting small to mid-sized businesses going again is going to require a lot of working capital and financing options that most banks are ill-equipped to provide. Going into 2022, the core question for the market will largely resolve around whether the government largesse continues and how that impacts the availability of capital and financing.