Clawback Deep Dive; Guide to follow-on capital

PEI takes a thorough look at what it really means to ‘fall out of carry’; Dechert’s guide to raising follow-on capital.

With first quarter reported valuations for private equity funds getting unsurprisingly pummeled, firms including Apollo and KKR are facing clawback obligations, some or all of which may not be realized. It depends on future performance, the waterfall structure and the clawback provisions in the fund documents. Private Equity International’s Carmela Mendoza does a Deep Dive into “What it means when a fund ‘falls out of carry’.”

There are other considerations GPs should take into account regarding whether realized clawbacks preserve the original, agreed-upon economics of a fund, and for that I’ll point you to the guest column we published last week from lawyers at Proskauer.

Follow-on capital: This handy guide from experts at Dechert, published in our May issue, walks us through six ways to raise follow-on capital, including annex funds, fund extensions, strip sales, secondaries transactions, cross trades and preferred equity funds.

Email prepared by Graham Bippart