Fund Financing

Fund-Financing

Fund finance solutions are increasingly becoming popular as investment managers continually seek to broaden the range of tools at their disposal to meet demands of their investors and other stakeholders.

Fund finance solutions encompass a range of equity and debt instruments used in the private capital funds eco-system. These include:

  • Subscription and capital call facilities secured against the rights associated with uncalled capital commitments of fund investors;
  • NAV/asset backed facilities that are secured by assets owned by a fund/borrower, and the cash flows generated from such assets;
  • Hybrid finance facilities that combine features of subscription line and NAV facilities;
  • Preferred equity solutions used by funds as an alternative to debt financing;
  • GP or management company lines secured against fund interests or fees receivable at the management company level, and
  • Term financing facilities provided to investors against their stakes in a wide range of alternative investment funds.

Borrowers may use fund finance solutions to meet a wide range of portfolio management and business objectives. Some of the more common ones include the following:

  • Managing capital calls during investment period for funds;
  • Optimising fund IRR by combining equity capital with fund level debt;
  • Leveraging exposure to portfolio assets;
  • Meeting working capital requirements at the fund level;
  • Purchasing tail-end portfolios/assets;
  • Facilitating fund recapitalizations;
  • Bridging gap to first and second close of newly launched funds in periods when fund-raising is slower than expected;
  • Recapitalizing portfolio companies for defensive or offensive purposes, and
  • Financing GP capital commitments.

We work closely with our clients in evaluating the various options that may be available to them and procure best terms from amongst the wide network of bank and non-bank lenders we maintain relationships with. We provide comprehensive back to front support in structuring and executing transactions and provide post execution deal servicing.

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