A year end message from the CEO – ATEL Capital Group – LEARN MORE
December 25, 2020
To Our Investors, Employees, Customers and Family:
It has been almost nine months since my last communication and I felt that as 2020 comes to a close it would be appropriate for me to provide an update on how the pandemic has impacted the company, our fortunes and stakeholders as well as the investment environment.
As I detailed in the last letter we continue to operate efficiently in the “work from home” environment. Our personnel have become proficient with Zoom, Teams, Avaya Workplace as well as other applications that make remote work possible. Had this pandemic happened twenty years ago normal operations would have been virtually impossible. We are fortunate that we live in a time when technological innovation is at a stage capable of meeting this crisis.
Our San Francisco office has been closed for the majority of the past nine months. As a financial services company we are considered an essential business and could have remained open. We experimented with short periods of opening using a strategy of dividing the company into an A and B group with each group coming to the office every other week so that in the event of a COVID-19 exposure only one group would be affected. After a couple of scares, which thankfully turned out to be false alarms, I decided that we should continue working from home and keep the office closed until further notice.
We continue to raise money institutionally for both our leasing and private debt programs albeit at a slower pace than normal. I am pleased to report that despite the pandemic we have welcomed a significant new international institutional investor for both leasing and private debt along with several new institutional investors for our private debt program. Additionally, we have seen significant increased commitments from our existing loyal investor base.
ATEL is proud that we maintained full employment while successfully recruiting a National Sales Manager for our leasing team as well as hiring a Director of Institutional Sales over the past year. We are currently recruiting for additional sales talent for both our leasing and private debt teams.
I am pleased to report that over the past few months several of our private debt portfolio companies have had liquidity events resulting in unrealized gains of almost $20MM for our investors. Our private debt portfolio companies remain strong with no defaults and report adequate cash reserves into the foreseeable future. As always, our investment grade portfolio of low-tech leased equipment assets continues to perform as expected with no credit issues.
Demand for both leasing and private debt remain strong. However, we did notice a slowdown in leasing this year which is now reversing with strong demand for capital equipment purchases in 2021 that were delayed by the pandemic
This has been a challenging year, possibly the most challenging of my career. We needed to learn how to operate effectively with our San Francisco headquarters closed and manage the company in the best interest of our employees, investors, customers, and families. Over the course of the past year, we have done our best to provide assistance to those less fortunate both personally and thru The ATEL Foundation. My thoughts are with the many that have suffered from this tragedy. I believe that together we have successfully weathered the storm and that the future outlook is bright. With the announcement and deployment of multiple vaccines for the virus there is light at the end of the tunnel with hopefully a return to normalcy during the first half of 2021.
As we look forward to reopening early next year, I wish to thank our employees, investors, customers, and families for their continued support during this difficult time.
Chief Executive Officer
March 22, 2020
To Our Investors, Employees, Customers and Family:
As I'm sure you are all aware San Francisco has been under a shelter in place directive since Tuesday which is due to expire on April 7. We began working from home on Monday and as I write this it is now Wednesday afternoon. I'm pleased to report that everyone at ATEL is doing well and efficiently working from home and using technology to allow us to remain operational.
Specifically, we are using Microsoft Teams to chat, share documents and video conference. Additionally, we have the Avaya Workplace App on our phones, laptops, iPads and personal computers. This app allows us to maintain our office phone number from anywhere in the world, in fact if you call our main number during normal business hours (415-989-8800) you will find that our switchboard operator is answering the line as if she was in the office. In addition, our Investor Services number (800-543-2835, Ext. 3) remains full operational as well.
It is fortunate that as a financial services company we are able to perform all of our functions efficiently on a remote basis. Although only a limited number of ATEL personnel have worked remotely in the past we're finding that if anything as a group we are more efficient as there is very little else to do when you're confined to your residence most of the day.
This week we have successfully had an investment committee meeting using Teams video. I have personally had meetings with our leasing group as well as our venture group using video conferencing and I am aware that accounting, HR, and legal have done the same. I am continually reviewing transactions from both our leasing group and our venture group and both teams continue to work on new deals and closing existing pipeline deals. While it is a little more difficult to prospect for new potential customers at this time we're finding that existing customers and pipeline customers we are currently engaged with are still available and ready to do business. In fact, it appears to us that much of the US economy including our lessees, venture capital firms, venture backed companies, vendors and service providers have quickly moved to online “virtual” offices allowing for a smooth transition to remote telecommuting.
Our syndications group is finding that there is an increased opportunity to purchase seasoned leases from bank portfolios. This is to be expected and consistent with what we have seen in the past in previous economic slowdowns as the banks want to sell parts of their portfolios to improve earnings during the next several quarters.
As all of our fundings are done electronically using wire transfers we continue to document and sign deals using “e-sign” operating normally in the current environment. Essentially all of our billing, collecting and payables have been done electronically using ACH (Automated Clearing House) and wire transfers for quite some time so there is no issue with collecting payments from lessees and borrowers or making payments as needed and most importantly making distributions to investors.
As with the rest of the company our accounting department has a desktop application which allows them to access their office computers remotely, which was recently implemented and after the first day has worked seamlessly. Rest assured that we will be up to date on all of our financial data reporting, SEC filings and audit compliance.
Everyone at ATEL is still receiving their snail mail and express mail. We have one of our mailroom personnel going to the office each day opening the mail, scanning it and delivering it electronically to the appropriate person. Although this is not a perfect arrangement we believe it will suffice so that anything arriving by US Postal service or FedEx/UPS will be handled in a timely manner.
ATEL has been fortunate as a financial services company to be in a position to continue relatively normal operations in the current environment. I am very sympathetic to what is going on around our city, country and world. We are not sure how long this is going to last but you can rest assured that we will be on the job regardless of the duration.
Please let me know if you have any questions about your investment, our current operations or anything else. The entire ATEL team is available for you 24/7, please do not hesitate to contact us as needed. Wishing the best of health to everyone.
Chief Executive Officer