Fund Finance

A relatively new form of financing faces its moment of truth. As banks retreat from lending amid unprecedented economic chaos, a handful of ‘concentrated NAV lenders’ may be seeing a new phase in the evolution of their young market.

Two lawyers weigh in on facing the double-barreled challenge of covid-19; first preview of an upcoming guide to GP-led liquidity solutions from Proskauer.

The advisory firm is working on solutions for LPs that may not have sufficient liquidity to meet a capital call, partner Peter Martenson said.

For those seeking liquidity via NAV facilities, implementation may be delayed, say lawyers from Debevoise & Plimpton.

While there have been fewer meetings, and they are on Zoom, there are meetings, and they have been productive towards advancing raises forward.

CFOs say they welcome ILPA’s call for more disclosure on subscription credit line usage, but some still argue producing two different IRRs will only further complicate reporting.

Me: 'Thoughts on the ILPA recs?' You: 'They’re great. But I want to keep my sub line drawn for the first two years of the next fund'; Compliance during the pandemic: tips and advice from experts.

CFOs speaking to Private Funds CFO are keen to be able to keep subscription credit lines drawn until their funds hold a final close to avoid what they say are messy LP rebalancing issues.

The industry organization is circulating a draft proposal recommending a host of disclosures on GPs’ use of subscription credit lines, with an eye to helping LPs manage exposure to the lines, allocation to PE and overall liquidity.

ILPA outlines how LPs can estimate their subscription credit line liability in a draft set of recommendations on disclosures reviewed by Private Funds CFO.