Introduction Large family offices and institutional investors are increasingly utilizing NAV loans on their alternatives holdings as a portfolio management tool. As allocations to alternatives have scaled, so, too, has...
Fund sponsors may offer their employees and other investment professionals an opportunity to invest in its funds through a co-investment program, which a lender may partially finance. While co-investment loan...
A key component of the collateral package for subscription-backed credit facilities (each, a “Facility”) is the security interest an investment fund (each, a “Fund”) grants to the lender(s) under a...
Credit facility documents typically include a waiver of consequential damages and an indemnification provision. While these provisions are typically part of the "boilerplate" language in the relevant documents, lenders must...
The outbreak of COVID-19 has caused widespread disruptions to economic activity worldwide, which has in turn impacted local and global financial markets. The fund finance market has nevertheless seen significant activity notwithstanding (or because of) COVID-19 in the first half of 2020.
As the fund finance market continues to mature, fund-related product offerings are expanding both in number and in customization, attracting a broader array of private equity and real estate funds (“Funds”) and credit providers, and increasing the range of the financing products available to Funds and their Sponsors (“Sponsors”) beyond the traditional subscription credit facility product.
A management fee credit facility (a “Management Fee Facility”) is a loan made by a bank or other financial institution (a “Lender”) to the management company or investment advisor (collectively, a “Management Company”) that is typically the sponsor (or affiliated therewith) (a “Sponsor”) of a private equity fund (a “Fund”).
As part of the evolution of the fund finance market, some lenders seeking a competitive advantage have expanded their product offerings to private equity and other similar funds (a “Fund”) from traditional capital call facilities made to closed-end Funds to other financing products, including lines of credit to open-ended Funds or separate-account vehicles and net asset value facilities.