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Major lenders in subscription credit facilities reined in new lending shortly after the crisis began in March, focusing on existing clients and facing various constraints. Smaller banks stepped in to pick up new business they might otherwise not have been able to compete for.
Everyone in the subscription credit facility market is ‘busy’, but it is far from business as usual. Industry players wonder what the future of the sector looks like, and reveal critical changes that may suggest a new, if still evolving, normal for the market.
Aberdeen Standard Investments, which participates in sub line transactions, is seeing a surge in dealflow and banks building out syndication abilities.
Buyouts brings some LP perspective to the NAV loan market. Plus: portfolio company debt-buybacks, and NAV loans for credit funds and even LPs.
ESG ratings agencies have started to make a push into private markets; ILPA has published its final guidelines for subscription line use and reporting; KKR exec announces exit.
Employer with magnifying glass exploring application papers
The latest guidance from the LP body encourages GPs to disclose net IRR with and without the use of such facilities, in addition to the methodology used to reach that figure.
credit - subscription credit lines
Fried, Frank, Harris, Shriver & Jacobson partners Kathryn Cecil, Jons Lehmann and Jan Sysel take a look at some of the unique considerations separately managed account borrowers need to take into account when taking out a subscription credit facility.
Portfolio finance can offer additional investment firepower or a source of liquidity, both of which are in high demand in the fallout from the pandemic, explains Augustin Duhamel.
Because of the greater sophistication necessary for private equity investing, what’s not likely any time soon is that individual investors will be able to directly invest in a private equity fund as a standalone product.
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.
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