Due Diligence in Fund Finance Transactions: Key Considerations for Lenders in Subscription and NAV Facilities
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE webinar will discuss various aspects of due diligence which should be conducted in fund finance transactions, including subscription credit facilities (SCF) and net asset value (NAV) credit facilities. The panel will describe some of the current diligence practices typically involved in each type of credit facility and discuss potential changes to due diligence in these fund financing transactions.
Outline
- Due diligence in the current fund finance environment
- Due diligence for subscription credit facilities
- Subscription agreements
- Limited partnership agreement
- Side letters
- Private placement memoranda
- Due diligence for NAV credit facilities
- Documentation relating to underlying investments
- Organizational documents of borrower and guarantor
- Underwriting the collateral and facility
Benefits
The panel will review these and other important issues:
- Why has due diligence become particularly important in the current fund finance environment?
- What are the key provisions in a limited partnership agreement that could affect the ability of a fund to enter into an SCF?
- What are some red flags that lenders should be aware of in conducting due diligence on a NAV or SCF deal?
Faculty
Mimi C. Cheng
Partner
Simpson Thacher & Bartlett
Ms. Cheng is a Partner in the Banking and Credit, Fund Finance and Backleverage and Investment-Backed Financing... | Read More
Ms. Cheng is a Partner in the Banking and Credit, Fund Finance and Backleverage and Investment-Backed Financing Practices, and has extensive experience counseling private equity funds, investment banks and other large financial institutions on the use of leverage products secured by, or referencing, public and private investment property. She regularly advises on financings designed to facilitate and support fund investment activities, including subscription facilities, NAV facilities, hybrid subscription and basket facilities, margin loans and other forms of backleverage. Ms. Cheng has represented clients including BlackRock, Blackstone, KKR, KSL Capital Partners, JPMorgan, Silver Lake Partners and Sixth Street Partners.
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J. Eric Holland
Partner
Duane Morris
Mr. Holland practices in the area of corporate law with a focus on complex financings and commercial lending.... | Read More
Mr. Holland practices in the area of corporate law with a focus on complex financings and commercial lending. He represents major domestic and foreign investment banks, hedge funds and other institutional lenders (including direct lenders), and secondarily borrowers, in asset-based, reserve-based and leveraged credit facilities (senior and mezzanine), in domestic and cross-border, secured and unsecured credit facilities and other financial transactions. Mr. Holland‘s representative transactions include senior and subordinated debt financings, ABL, fund finance (subscription line, NAV, hybrid), acquisition financings, term loans, working capital loans and reserve-based loans. Additionally, he has also been involved in work-outs, restructurings and bankruptcies of several facilities.
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Jennifer J. Levitt
Partner
Simpson Thacher & Bartlett
Ms. Levitt is a member of the Banking and Credit Practice. She regularly represents financial sponsors in connection... | Read More
Ms. Levitt is a member of the Banking and Credit Practice. She regularly represents financial sponsors in connection with debt financings for their private equity, real estate, infrastructure, mezzanine debt and other investment funds. Ms. Levitt has extensive experience in complicated financings designed to provide fund-level leverage to facilitate and support investment activities, including subscription facilities, NAV facilities, margin loans, other forms of back-leverage and GP stake investments. She has represented clients including BlackRock, Blackstone, Carlyle, Centerbridge, JPMorgan, KKR, KSL Capital Partners, Oaktree Capital Management, Silver Lake Partners and Sixth Street Partners.
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