When market dislocations dramatically reshuffle the market in unanticipated ways, the sponsors and investors best positioned to pounce on deals – even if they fall outside of their existing funds’ strategies – can reap significant rewards. Therefore, GCs and CCOs need to be aware of the short-term and long-term resources at their disposal to support an unanticipated strategic shift. A recent Private Equity Law Report webinar
explored lessons from the pandemic that can prepare sponsors and investors for the next market disruption. The discussion was moderated by Rorie A. Norton, Editor of the Private Equity Law Report, and featured Skadden partner John M. Caccia and Morgan Lewis partner Christopher J. Dlutowski. This second article in a two-part series outlines short-term machinations and long-term planning that sponsors and investors can seize upon to pursue opportunities in a market dislocation that fall outside of their funds’ investment strategies. The first article
addressed issues exposed by the pandemic; pre-considerations to weigh when pivoting investment strategies; and short-term options for modifying existing fund vehicles to pursue opportunities. For further insights from Dlutowski, see “Separating the Signal From the Noise to Identify Trends in PE Structures, Processes and Terms
” (Nov. 17, 2020). For additional commentary from Skadden attorneys, see “ACA Program Reviews State and Local Pay to Play Rules; Traps for the Unwary; and Compliance (Part Two of Two)
” (Feb. 21, 2019).