Leverage

In the second part of our series, Cyril Demaria, head of private markets at Wellershoff & Partners, examines the evidence that secondaries perform better than funds of funds.

We round up the key takeaways from sister publication Private Equity International's coverage of fund finance, such as that these lines arguably make the most sense for secondaries.

The strategy suits both fledgling and mature portfolios – with caveats – says Cambridge Associates.

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.

The use of subscription facilities by funds has seen its criticism, but the practice is not without its positives, write Thomas Smith and Almas Daud.

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.