Secondary Credit Facilities for Private Equity and Hedge Funds: Financing LP Interests for Better Returns, Liquidity

Negotiating Eligible Investments, Advance Rates, Borrower Base and Financial Covenants; Alternative Deal Structures

A live 90-minute CLE webinar with interactive Q&A

Tuesday, August 8, 2017
1:00pm-2:30pm EDT, 10:00am-11:30am PDT

This CLE webinar will enable finance counsel to structure secondary credit facilities secured by limited partnership (LP) interests and related assets in private equity and hedge funds. The panel will discuss alternative deal structures, the deal terms related to each, and pitfalls to avoid.


Private equity sponsors are increasingly entering into secondary credit facilities secured by LP interests and other assets, to amplify returns and further monetize the investments in their portfolios. Similarly, hedge fund managers continue to use leverage secured by underlying LP interests to boost returns, and to assist with investor subscription and redemption cash management issues.

Secondary credit facilities are often structured to avoid violating certain restrictions on pledges or transfers of LP interests or to simply the transaction. A single purpose vehicle might be established to hold the LP interests and then pledge them to the lender as security for the loan.

Alternatively, the fund might transfer the LP interests into a securities account held by a custodian who functions as an intermediary, with the lender perfecting its security interest under Article 8 of the UCC and entitled to take control of the securities under an account control agreement.

Counsel needs an understanding of both underwriting and legal considerations to negotiate deal terms common to these facilities. These include the nature and types of LP interests and other collateral assets that may qualify as “eligible investments,” the advance rate the lender will charge for each type of collateral, the calculation of the borrower base, and financial covenants such as LTV or NAV limitations that may trigger an event of default.

Listen as our authoritative panel discusses the structural approaches to leveraging the value of LP interests in private equity and hedge funds. The panel will also examine the key negotiated provisions in each type of transaction.


  1. Secondary Credit Facilities - advantages, restrictions
  2. Approaches to structuring
    1. Straight pledge of LP interests (probably not practicable)
    2. Special purpose vehicle as holder of LP interests and borrower
    3. Use of securities account and account control agreement; UCC perfection
  3. Key financing terms
    1. Eligible investments
    2. Advance rates
    3. Borrowing base
    4. Financial covenants and related events of default
    5. Other


The panel will review these and other key issues:

  • What are the advantages and potential problems with leveraging LP interests and assets?
  • When is a SPV structure, as opposed to a UCC pledge with an account control agreement, appropriate for a PE fund?
  • What are the key deal terms to consider in a secondary credit facility?
  • How might deal terms vary between private equity and hedge funds?


Michael D. Belsley, Partner
Kirkland & Ellis, Chicago

Mr. Belsley's practice involves structuring, negotiating and documenting complex business transactions, including strategic and leveraged acquisitions, recapitalizations and divestitures, formation and governance of private equity funds (including primary investments in and secondary market sales of private equity fund interests), venture capital investments, mezzanine debt financings, equity financings and corporate governance matters. He regularly represents buyers and sellers, as well as market intermediaries, in their secondary market activities. His secondary market experience includes traditional portfolio sales, structured secondaries, synthetic secondaries, captive fund spin-outs, stapled secondary offerings, fund recapitalizations and restructurings, follow-on funding secondaries and orphaned asset sales in a variety of asset classes, including the venture capital, leveraged buy-out, special situations and real estate sectors. He also frequently represents both private equity fund sponsors and investors in private equity fund formations, fund-level restructurings and governance matters.

Leon Stephenson, Partner, European Head of Funds Finance
Reed Smith, London

Mr. Stephenson is a member of the Financial Industry Group and Head of Funds Financing in London. He and his team work with banks, other financial institutional lenders, Managers, General Partners and Limited Partners of funds on specialist financing transactions with private equity, secondaries, real estate, direct lending and infrastructure funds. His Firm has one of the market leading funds finance practices acting for lenders and funds in the European, US, Asian and Middle Eastern markets. He has particular specialist knowledge of NAV/Asset Backed and Hybrid facilities, capital call facilities, co-investment and GP/Manager support facilities and other types of liquidity facilities provided to funds. He represents a large proportion of lenders that provide fund financing and has just won the award of partner of the year for Banking at the Client Choice Awards 2017.

Jan Sysel, Partner
Fried Frank Harris Shriver & Jacobson, New York

Mr. Sysel represents sponsors, borrowers, arrangers and lenders on a wide variety of financing transactions primarily in connection with fund formation, as well as leveraged acquisitions, spinoffs, recapitalizations and restructurings, across a broad range of industries. He has extensive experience in structuring, negotiating, documenting and executing complex financings, including syndicated senior facilities, mezzanine facilities and private debt placements. His work includes unsecured and secured first and second lien facilities, both cash flow-based and asset-based, with particular focus on fund subscription facilities and other types of investment fund leverage.

Live Webinar

Live Webinar $297.00

Add a colleague on the same connection in the same room for only $97.00 in the shopping cart or by calling customer service.

This webinar is eligible for at least 1.5 general CLE credits.

CLE credits are not available for PR.

*In KS, OH, PA, for more than 1 attendee on the connection you must contact Strafford CLE via email or call 1-800-926-7926 ext. 35 prior to the program for special instructions.


CLE On-Demand - Streaming Video

Includes recorded streaming video of full program plus PDF handouts.

On-demand is the only recorded format recognized for CLE credits in DE, IN, KS, LA, MS, NC, OH, OK, SC, TN, VA, WI.

AK, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN*, KS, KY, LA, ME, MN, MO, MT, NC, ND, NH**, NJ, NM, NV, NY, OH*, OK, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)

*Only available for attorneys admitted for more than two years. For OH CLE credits, only programs recorded within the current calendar year are eligible - contact the CLE department for verification.

**NH attendees must self-determine if a program is eligible for credit and self-report their attendance.

CLE On-Demand Video $297.00
Available 48 hours after the live event

How does this work?

Recorded Event

Includes full event recording plus handouts (available after live webinar).

Strafford is an approved provider and self-study CLE credit is available in most states.

AK, AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, KY, ME, MN, MO, MT, ND, NJ, NM, NY, OR, PA, TN, TX, UT, VT, WA, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)

Strafford will process CLE credit for one person on each recording.

Additional copies of a recording can be purchased at a discount. Please call Strafford Customer Service toll-free at 1-800-926-7926 ext 10 or email to place your order.

Recorded Webinar Download $297.00
Available 48 hours after the live event

How does this work?

Recorded Audio Download (MP3) $297.00
Available 24 hours after the live event

How does this work?

DVD (Slide Presentation with Audio) $297.00 plus $9.45 S&H
Available ten business days after the live event

How does this work?

Registration Plus Recorded Event

Best value!

Live Webinar & Webinar Download $394.00

Recorded Webinar Download Only $97.00 with Registration/Webinar Combo

Live Webinar & Audio Download $394.00

Recorded Audio Download (MP3) Only $97.00 with Registration/MP3 Combo

Live Webinar & DVD $394.00 plus $9.45 S&H

DVD (Slide Presentation with Audio) Only $97.00 with Registration/DVD Combo


Strafford webinars offer several options for participation: online viewing of speaker-controlled PowerPoint presentations with audio via computer speakers or via phone; or audio only via telephone (download speaker handouts prior to the program).  Please note that our webinars do not feature videos of the presenters.

or call 1-800-926-7926

Can't Attend the Live Program?

CLE Credits By State

See CLE State Map >

or call 1-800-926-7926

Customer Reviews

Very focused seminar that provided the information I expected in a concise format.

Kimberly M. Butler

Downs Rachlin Martin

I liked that Strafford's program covered real life situations and claims.

Renee Becnel

Occidental Petroleum

I like that I can share Strafford's programs with colleagues and I think the price is fair.

Gesta Abols


I thought Strafford's program covered a well-balanced handling of issues and solutions.

James Newsom

Rath, Young & Pignatelli

I was pleased with the programs practicality and the hands-on knowledge of the speakers.

Michele Vaillancourt

Winthrop & Weinstine

or call 1-800-926-7926

Banking & Finance Law Advisory Board

Irving C. Apar


Thompson Hine

Mark N. Berman

Adjunct Professor

Northeastern University

Willa Cohen Bruckner


Alston & Bird

Lawrence Kaplan

Of Counsel

Paul Hastings

Kevin Petrasic


White & Case

Laura D. Richman


Mayer Brown

Robert M. Stern


Orrick Herrington & Sutcliffe

Andrew Stutzman


Stradley Ronon Stevens & Young

or call 1-800-926-7926

Our Guarantee

Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.