Key takeaways Private Credit in Vietnam- opportunities and challenges. A significant development in the Vietnam investment landscape in recent years which facilitates the deployment of capital has been the emergence of...more
Subscription credit facilities, commonly referred to as “sub-lines” or “capital call facilities,” are a cornerstone of private equity finance. These facilities are secured by a bespoke collateral package that protects lenders...more
In the evolving fund finance market, lenders are constantly assessing ways to mitigate risk and enhance credit support in order to provide for the smooth operation of subscription-based credit facilities. One such credit...more
EXECUTIVE SUMMARY - Subscription credit facilities rely on the obligations of investors to a private investment fund (“Fund”) to contribute their capital commitments to the Fund when called. From a subscription credit...more
Subscription credit facilities are a widely utilized product in the fund finance market, offering sponsors access to a reliable source of financing to bridge capital call and to lenders collateral backed by investors’ capital...more
The recent closing by Goldman Sachs of its highly innovative and market leading US$475 million “capital call” securitisation of subscription credit lines has generated a lot of interest in both fund finance and structured...more
Subscription credit facilities usually require the ability to make, receive, and enforce capital calls on a pro rata basis, whether directly or indirectly through a cascading pledge structure, on 100% of the pool of capital...more
A subscription credit facility is secured in part by the fund’s and its general partner’s (“GP”) right to call unfunded capital commitments from the fund’s investors, to receive capital contributions once funded and to...more
The key component of any subscription credit facility is the underlying capital commitments that are pledged to secure the facility. Virtually every lender will require some level of over-collateralization – meaning, investor...more
High net worth feeder funds (“HNW Feeder Funds”) have emerged as a strategic resource for private equity funds seeking additional sources of capital. The HNW Feeder Fund structure often involves a partnership between private...more
Recallable capital has become an increasingly common concept in subscription credit facilities. In this Legal Update, we explain the concept of recallable capital and its role in subscription credit facilities, as well as...more
The year 2023 presented the fund finance industry with many challenges that it rose to face with an inventiveness and rigour that showed just how mature and multi-faceted the market has become. At Cadwalader in London we saw...more
Net asset value based credit facilities (“NAV Facilities”) are credit facilities pursuant to which the availability thereunder is based on the net asset value of the investments of the borrower, typically a private fund. The...more
Recent years have seen significant growth and innovation in the fund finance industry — and, with an increase in the number and complexity of products in the market, it has become commonplace for industry publications and...more
As we enter back-to-school season and look forward to FFA U this fall, we thought a back-to-basics primer on the limited partnership agreement (the “LPA”), which is the legal and credit cornerstone of our product, would be...more
As leveraged loan markets have been impacted by a challenging macroeconomic environment, private equity sponsors are sharpening their focus on flexibility in their portfolio companies’ loan documents Given the sharp...more
For funds that are nearing the end of their investment period and have limited or no remaining unfunded capital commitments, the need to continue a subscription line facility for ongoing liquidity may continue to exist for...more
The security package for a subscription facility will typically include security over the uncalled capital commitments of a fund’s investors, including: (i) the right to make capital calls on investors in respect of their...more
This article focuses on how private company and private fund interests are typically valued in NAV loan facilities and the increased focus we have seen lenders place on valuation issues since the beginning of the...more
Recent press coverage has brought to light allegations of fraud in relation to a subscription credit facility made available to a fund managed by a Florida-based private equity fund manager, JES Global Capital. The...more
For private investment funds with limited or no remaining uncalled commitments, net asset value (NAV) and hybrid credit facilities can provide a useful source of liquidity to support underperforming assets or allow funds to...more
Use of subscription credit facilities by private funds has increased significantly since the last financial crisis. Now, as fund managers grapple with the liquidity challenges presented by COVID-19, there is more attention...more