Private Equity GP and Employee Co-Investment Credit Facilities, Management Lines of Credit
Due Diligence, Structuring and Documentation; Role of Sponsor, Administrative Issues
Recording of a 90-minute premium CLE video webinar with Q&A
The CLE course will outline the key considerations in structuring management lines of credit, general partner (GP) financing, and employee co-investment facilities within private equity funds. The panel will discuss collateral security packages, fund obligations, administrative concerns, common points of lender diligence, and the impact that each of these types of transactions may have on a fund's subscription facility.
- The impetus behind co-investment credit facilities for the sponsor and lender
- Management line of credit
- Collateral: points of contention
- Due diligence of manager and management agreement(s)
- Deal terms
- Employee co-investment facilities
- Role of sponsor
- Due diligence of individual borrowers
- Employee departures and other administrative issues
- GP financing
- Issues associated with the pledge of partnership interest: bifurcation into GP and LP interests
- Ensuring continued compliance with fund agreement and fund credit facilities
- Potential conflicts of interest
The panel will review these and other relevant issues:
- What are the key deal terms and points of contention in negotiating management lines of credit?
- What are the preferred alternatives for structuring employee co-investment facilities?
- How should a sponsor handle the departure of a key employee who is a party to a credit facility? What should the documents say?
- What are the benefits of bifurcating the GP's interest into a general partnership and limited partnership interest? Is it necessary?
Simpson Thacher & Bartlett
Ms. Kohen concentrates her practice on representing financial sponsors in connection with debt financings for their... | Read More
Ms. Kohen concentrates her practice on representing financial sponsors in connection with debt financings for their private equity, real estate, energy, infrastructure, credit and other investment funds. She has extensive experience in complicated financings designed to provide fund-level leverage to facilitate and support investment activities, as well as management lines and co-investment loan programs. Ms. Kohen regularly advises on a wide variety of financings crucial to the formation and ongoing operations of investment funds, including subscription (or capital call) facilities secured by uncalled capital commitments and related rights, with borrowing base capacity for the fund, as well as its parallel funds, alternative investment vehicles and portfolio companies; unsecured demand lines with an uncalled capital coverage requirement; fund guarantees of portfolio level investments; letter of credit facilities, NAV-based facilities and hybrid variations, including facilities provided as aftercare facilities for funds; co-investment loan programs made available, directly or indirectly, to employees and partners and secured by their fund interests; and general partner facilities and management lines provided to investment advisors for working capital purposes. In addition, Ms. Kohen has co-authored chapters in several editions of Global Legal Insights’ Fund Finance guide, which covers legal trends and developments in the greater fund finance market and provides law firms, financial institutions, funds and investors with comprehensive insight.Close
James S. Lawlor
Mr. Lawlor is a member of the Financial Industry Group. His practice includes representation of lenders and borrowers... | Read More
Mr. Lawlor is a member of the Financial Industry Group. His practice includes representation of lenders and borrowers in commercial finance matters and of issuers, underwriters and credit enhancers in taxable and tax exempt debt offerings. Mr. Lawlor has extensive and diverse experience in public, securitized and project financings. He has served as bond, underwriter, bank and borrower counsel in bond issuances, and as both lender's and borrower's counsel on syndicated and bilateral bank credit agreements. A significant portion of Mr. Lawlor’s practice involves finance transactions in the healthcare, communications and media, energy, higher education, non-profit, and transportation industries.Close