Sponsors of secondaries and funds of funds should be mindful of several key issues that can arise when structuring and negotiating these financing arrangements, according to law firm Dechert.
Record half-yearly fundraising means buyers have had to expand their investment scope to chase promised returns. Here’s a trio of innovative transactions that caught our eye.
The €650m deal moved assets from Recovery Fund 2008 into a new vehicle.
The deal involved Varma Mutual Fund Pension selling part of its stakes in two MML Capital Partners mezzanine funds to the investment manager.
Quarterly reports to investors must be explicit on the use of subscription credit lines, while LPs must ask for data that discounts the impact of borrowed cash, the lobby group recommends.
Crestline, which is based in Texas, has shifted towards the preferred equity niche. Secondaries Investor caught up with the firm’s head of PE credit and fund restructuring to talk deal sourcing and increased interest in preferred equity.
One of the interests sold in the manager's 2006-vintage distressed fund was a $100m stake held by Ontario Teachers' Pension Plan, Secondaries Investor has learned.
Secondaries funds take full advantage of subscription lines, but subscription lines also benefit from the secondaries market.
Providers of subscription lines are increasingly looking to take control of LP transfers, according to lawyers at Debevoise & Plimpton.
Buyers are using levels of leverage that 'haven't been seen before', according to Mario Giannini.