Key Considerations for Private Credit Funds Seeking Leverage Through Fund Financing Facilities

As fund financing facilities become more widely used in the private funds industry, private credit funds are increasingly the source of those borrowings in lieu of traditional banks. That development obscures the fact, however, that private credit funds frequently seek to avail themselves of fund financing facilities as well and, in fact, often pursue multiple types of facilities at once (e.g., a management fee line of credit and a subscription facility). As they pursue those financing facilities, private credit managers face different issues and considerations than other types of fund managers. To shed light on those dynamics, Strafford CLE Webinars recently hosted a program examining various leverage solutions that private credit funds may consider using at various stages in a fund’s life; key features and benefits of different options; and some of the issues that may require advance planning and careful navigation. Some of the financing facilities covered include subscription facilities, co‑investment facilities, rated note feeder structures, repo structures, net asset value facilities and others. The program featured Anastasia N. Kaup, partner at Fund Finance Partners, LLC; Mark C. Dempsey, partner at Mayer Brown LLP; and Shana E. Ramirez, partner at Katten Muchin Rosenman LLP. This article summarizes key takeaways from the program. See “Mergermarket Survey Finds Strong Drivers for Continued Growth, Key Challenges Faced by Private Credit” (Jun. 1, 2023); and “Trends in Private Credit Structures, Terms and Adoption Amidst Its Growth During a Challenging Market” (Apr. 6, 2023).

To read the full article

Continue reading your article with a PELR subscription.