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

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Thursday, July 28, 2022

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, July 1, 2022

or call 1-800-926-7926

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.


Recent years have seen a marked increase in the use of SMAs--single investor funds that allow for tailored commercial terms and documentation. Because of the single investor structure, SMAs present unique risks that finance counsel must consider when structuring an SMA credit facility.

Counsel must carefully review fund documents. The lender may require an investor letter or amendment to the fund agreement to establish a direct obligation of the investor to cure defaults under the loan documents. Since the investor will likely be an SPE, the parent may also require a comfort letter or guaranty.

The credit agreement should include additional events of default not found in multiple investor facilities, including the bankruptcy or a failure to timely fund a capital call by the investor or a rating downgrade of the investor. Transfers and withdrawal rights should be prohibited without prior lender consent.

Lenders might require enhanced reporting requirements, as the need for prompt and detailed information increases with a single investor. If the investor does not have a public credit rating, periodic financials and other information may also be required.

Listen as our authoritative panel discusses legal and underwriting issues associated with SMA financing and best practices in due diligence and documentation of SMA loans.



  1. Features of an SMA
    1. One investor
    2. Tailored partnership documents: special reporting requirements and consent rights
  2. Lender concerns with SMA financing
    1. Privity with the investor
    2. Entity structure: SPE
    3. Single investor default results in loan default
  3. Structuring the SMA credit facility
    1. Due diligence: KYC, document review
    2. Amendment of partnership document
    3. Investor letter: guaranty from SPE parent
    4. Expanded default provisions: failure to fund capital calls, bankruptcy of investor, other
    5. Enhanced reporting requirements
    6. Special concerns with umbrella facilities


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?


Montgomery, Christopher
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

Stephenson, Leon
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

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Early Discount (through 07/01/22)

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