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
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course 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.
- Secondary Credit Facilities - advantages, restrictions
- Approaches to structuring
- Straight pledge of LP interests (probably not practicable)
- Special purpose vehicle as holder of LP interests and borrower
- Use of securities account and account control agreement; UCC perfection
- Key financing terms
- Eligible investments
- Advance rates
- Borrowing base
- Financial covenants and related events of default
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
Kirkland & Ellis
Mr. Belsley's practice involves structuring, negotiating and documenting complex business transactions, including... | Read More
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.Close
Partner, European Head of Funds Finance
Mr. Stephenson is a member of the Financial Industry Group and Head of Funds Financing in London. He and his team work... | Read More
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.Close