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Fund Finance
GPs can avoid potential liquidity issues by drawing down loans early and performing greater due diligence on their lenders.
GPs must think carefully about how fund-level leverage affects performance at the fund level and, by extension, their own stability, writes veteran investor Neil Harper.
GPs are increasingly looking to raise or release equity against their management companies. But what are their options, asks Investec Fund Finance’s Slade Spalding.
Growth in fund finance has overwhelmingly stemmed from subscription lines of credit to fund LP commitments during the first five years of a fund’s life. Pierre-Antoine de Selancy of 17Capital discusses what finance is available after the investment period.
PEI caught up with Fi Dinh, who led ING's first ESG-linked revolving credit facility, to discuss fund terms, interest rate calculations and sustainability targets.
The bank provided a subscription credit facility for Singapore's Quadria Capital that pegs its interest rate to fund-level ESG performance.
Credit lines are contentious but their ability to improve IRR appears limited to the most strongly performing funds and funds early in their life, writes Christoph Jäckel of Montana Capital Partners.
ATP PEP will ask GPs to provide an IRR that has been adjusted to compensate for the use of subscription credit lines, managing partner Torben Vangstrup told PEI.
The firm tries to secure non-recourse financing, long-term maturities and little-to-no financial maintenance covenants, according to chief executive Cyrus Madon.
On its Q2 earnings call, chief financial officer Bill Janetschek detailed the way the firm handles credit facilities.