Prepping your operations for the unprecedented

A guide to adapting your fund operations for coronavirus; face-to-face meetings are off the table for some PE firms.

Corona updates: Law firm Paul Weiss gives us this fifteen-point checklist for how to prepare your fund operations for covid-19. It includes eight things to consider when altering your fund documents, in light of the increasingly likely fact that 1) more distressed and even potential cheap public equity buys will be on the table and 2) current portfolio company investments may need further cash injections and longer investment periods.

Given the rise of subscription lines, which we’ve written about quite a lot here, and the high levels of leverage deployed at the portfolio level, this particular point from Paul Weiss seems it is crucial that PE pros check their fund docs for “borrowing limitations in fund documents and any requirement to reserve unfunded capital commitments for purposes of satisfying borrowings and other contingent liabilities.”

There’s also some good advice in here if you’re either in the process of offering a fund or preparing to raise one.

This one is a must-read.

Video-meetings: One of the tips Paul Weiss gives is to consider holding LP meetings via webcast or other remote means. That’s already happening, per this story from sister title Buyouts. But it isn’t just LP meetings PE players are cancelling their trips for (also courtesy of Buyouts).

What I would like to know is, how are CFOs viewing the prospect of significantly reduced travel expenditure? How is the spread of the virus affecting your jobs and the firms you work for? If you want to talk about it, give me a shout.

Email prepared by Graham Bippart