“2014 was the year for fund restructurings.”
That’s according to Sean Hill, partner at Proskauer, who said at a breakfast briefing in London this week the global law firm expects restructurings to increase this year.
“Secondaries firms are looking for ways to produce differentiated returns and are getting creative, particularly with end-of-life deals and assets that are in need of additional capital.”
He noted that restructurings would not just be limited to zombie funds or distressed situations, as is often the perception, but expects recapitalisations to become a more common strategic management tool, particularly for well-performing managers with older vintage funds in need of additional capital to fully realise value.
A recent example of a market transaction is the deal HarbourVest agreed with Doughty Hanson and its LPs. The firm’s secondaries team led the restructuring of Doughty Hanson Funds IV and V, and committed to the firm’s newest current fund in market via a stapled transaction.