LP liquidity running out faster than expected?

LP defaults have begun in Europe, and a look at common GP remedies; LPs are reporting high levels of satisfaction with the communication they’re getting from their investment managers; PEI launches CFOs & COOs Forum West.

LP defaults: In case you missed it on Friday, here is my story reporting that there have been two European LP defaults, and which includes the GP remedies section of an LPA (I’ve tried to de-legalese it for you). I’ve been told by multiple sources, including MJ Hudson’s Eamon Devlin, who is quoted in the piece, that its terms are very standard for both US and European LPAs. As I report in the piece, many – at least over here in the US – have been sanguine about LP liquidity, with some saying it would be a long while before any major players starting having any difficulties with capital calls or selectively defaulting, but word from Europe is that selective defaults by institutions have already begun.

Back in the good books: Under the current circumstances, it’s unsurprising that GPs are struggling to supply their investors with up-to-date information as it happens, and many have been left scratching their heads as to how to convey the state of their portfolios, as we recently reported. But it looks as though those hours spent on the phone are paying off. LPs have been pretty impressed at the level of communication and transparency they’re getting back from their GPs, reports sister title Buyouts Insider’s Chris Witkowsky. One LP even described the current state of GP communications as “the best I’ve ever seen.”

CFOs & COOs Forum West: Private Equity International is launching the inaugural West Coast version of its CFOs & COOs Forum. You can book your place, here. The CFOs & COOs Forum West will take place September 22-23, 2020 at The Marker Hotel San Francisco, California.

Email prepared by Graham Bippart and Philippa Kent