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Subscription credit facilities are a widely utilized product in the fund finance market, offering sponsors access to a reliable source of financing to bridge capital call and to lenders collateral backed by investors’ capital commitments rather than the underlying portfolio assets of a borrower.
In this article, we will explore the complex due diligence landscape that syndicate lenders must navigate when seeking to join a new or existing credit facility.
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Every deal has its quirks but, as anyone who has done a deal with a Lux entity will know, the EU brings its own set of regulatory considerations to the table (primarily AIFMD). In many cases when compared with parallel Delaware and Cayman workstreams, Lux can seem like (and in some cases is) a much more involved process.
We thought the start of the new year might be a good time for a refresher on how the Lux workstream can best be managed, why additional tasks are required (when compared to equivalent Delaware and Cayman vehicles), what these tasks are, and the common deal points that can pop up and give rise to negotiation. In short, how a lender and their counsel can best get their ‘Lux’ in a row to ensure a deal runs as smoothly as possible.
Credit ratings have traditionally been viewed as a tool to aid distribution of fund finance facilities. The role of ratings may be broadening, however, particularly in Europe under the next iteration of risk based capital standards.
The full KBRA report is available here.
The Loan Market Association has published January 2025 Fund Finance Insights highlighting a brief history and the evolution of Fund Finance in Europe.
The document discusses topics such as the emergence of subscription facilities, the fund and financing lifecycle and more.
Read it here.
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We're looking forward to The Future of Fund Finance | Europe, on 28 January at The Landmark Hotel in London. Cadwalader is proud to be a lead sponsor and have Partners George Pelling and Nick Shiren speaking at the conference, sharing their insight on key industry topics.
Thirteen Cadwalader partners, including Head of Fund Finance, Wes Mission, have been selected to the 2025 Lawdragon 500 Leading Lawyers in America. Each Cadwalader lawyer was selected based on journalistic research, submissions and vetting.
Although transfers by investors of their interests in a fund have always been a feature of subscription / capital call facilities, as of late, there has been a palpable uptick in investor transfers and this trend is set to continue, due to a multitude of factors.
This article explores the driving factors for the increase in investor transfers, the implications for rated subscription facilities and securitisations, how loan documents customarily deal with investor transfers, and due diligence considerations.
We're looking forward to The Future of Fund Finance | Europe, on 28 January at The Landmark Hotel in London. Cadwalader is proud to be a lead sponsor and have Partners George Pelling and Nick Shiren speaking at the conference, sharing their insight on key industry topics.
The Fund Finance Association is delighted to share the agenda for the upcoming 14th Annual Global Fund Finance Symposium, taking place February 24-27, 2025 at the Fontainebleau Miami Beach.
Nominations are still open! The FFA and Diversity in Fund Finance would like to support and recognize individuals in the industry for their outstanding overall contributions to furthering diversity, equity, and inclusion efforts in the fund finance market, their workplace, and/or the broader community.