LP defaults: institutional LP defaults have reportedly been very few since the beginning of this crisis but should they arise in your fund, Osborne Clarke lawyers have six practical tips for dealing with them, in this guest column.
Last I checked, the Fund Finance Association had reported one institutional default among its members – a corporate in a “completely disrupted industry.” Additionally, the MJ Hudson lawyer who was the source of my article on LP defaults back at the beginning of the pandemic, which caused a fair amount of commotion and no little outrage on the part of some subscription line lenders, has since confirmed to me that one of the two defaults he mentioned in that article was institutional, and that he has seen one other institutional default since, outside of the corporate entity mentioned above.
Still, three institutional defaults isn’t exactly a wave but as Osborne Clarke’s lawyers point out, LP defaults raise a host of complex issues, at a time when you’ve probably already got a lot on your plate, so it’s a possibility worth preparing for.
Insights 2020: our annual Private Funds CFO Insights Survey is live. More detail to follow, but you can participate here. Submissions are entirely confidential, the survey takes 10-15 minutes and the deadline is September 4. Insights 2020 aims to give finance executives at GPs across the US a clear view of the opinions and operations of their peers – we can’t do it without you!
Correction: Friday’s post of a video interview with eVestment’s Katie Bogue had a broken link to data on polls taken at the CFOs & COOs Forum in January. The polls are now embedded in the story, so if you want to know your peers’ outlook on their data management strategies, check it out here.
Email prepared by Graham Bippart