Separately Managed Accounts: Structuring Credit Facilities for One-Investor Funds
Amending Fund Documents, Investor Letters, Rating and Other Default Triggers, Transfer Rights, Immunity Waivers
A live 90-minute premium CLE video webinar with interactive Q&A
This CLE webinar will discuss the structuring and documentation of subscription credit facilities for separately managed accounts (SMAs). The panel will explain the appeal of the SMA structure for the investor and the fund manager and the additional legal and underwriting issues that a lender must consider in an SMA credit facility compared to a standard subscription credit facility.
Outline
- Features of an SMA
- One investor
- Tailored partnership documents: special reporting requirements and consent rights
- Lender concerns with SMA financing
- Privity with the investor
- Entity structure: SPE
- Single investor default results in loan default
- Structuring the SMA credit facility
- Due diligence: KYC, document review
- Amendment of partnership document
- Investor letter: guaranty from SPE parent
- Expanded default provisions: failure to fund capital calls, bankruptcy of investor, other
- Enhanced reporting requirements
- Special concerns with umbrella facilities
Benefits
The panel will review these and other critical issues:
- How might the provisions in an SMA fund agreement vary from a standard multiple investor fund agreement?
- What additional documentation is needed to obligate the investor under the loan documents? What if the investor is an SPE?
- What are default provisions to address the risk presented by having only one investor in the deal?
- Why would a lender require additional financial reporting for an SMA than it does from a standard fund?
Faculty
Christopher Montgomery
Special Counsel
Cadwalader Wickersham & Taft
Mr. Montgomery practices in the firm's Finance Group, where he represents lenders and lead agents in fund finance... | Read More
Mr. Montgomery practices in the firm's Finance Group, where he represents lenders and lead agents in fund finance transactions to private equity and other funds. His practice focuses on the due diligence, structuring, negotiation and documentation of both bilateral and syndicated subscription credit facilities.
Close
Leon Stephenson
Partner, European Head of Funds Finance
Reed Smith
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.
CloseEarly Discount (through 07/01/22)
Cannot Attend July 28?
Early Discount (through 07/01/22)
You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.