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The majority of subscription facilities are secured by the right to call capital and receive capital contributions from the fund’s investors and the bank deposit account into which those capital contribution proceeds are deposited by such investors. Focusing on the deposit account, frequently called the collateral account, there are two methods provided by Article 9 of the UCC for perfecting a lender’s security interest in such account: (1) the collateral account is maintained with the lender or (2) the lender and the fund enter into a control agreement with the bank that maintains the collateral account.
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The doctrine of sovereign immunity is a foundational element of the interplay between a governmental investor’s contractual obligation to satisfy capital calls and a fund’s or lender’s ability to enforce that obligation against the investor. We recently completed our comprehensive series on sovereign immunity across all fifty states of the United States, as well as England and Wales and a cameo from the Cayman Islands. In this article we look at the rest of the world. We assess key statutory and equitable principles, deconstruct how to satisfy judgments against foreign sovereigns and peruse related side-letter provisions so you can understand how to mitigate the risks of these international investors in your fund finance facilities.
Investec’s Private Equity Trends survey (formerly known as GP Trends) closes on the 28th September, so don’t miss your chance to share your thoughts and experiences and contribute to a better understanding of the industry.
Are you registered yet? We are just a few weeks away and would love for you to join us for our seventh Annual Finance Forum on October 19 at The Ritz-Carlton in Charlotte.
Leaders from over 150 of the world’s top financial institutions are registered for an interactive day with the industry’s foremost experts. We are going to take deep dives into the wide range of challenges and opportunities that will shape the global financial landscape in 2024 and beyond.
Subtly pivoting from the topic of collateral accounts, introduced in the August 25, 2023 Fund Finance Friday article by Chad Stackhouse and Katie Clardy titled “Control or Control Agreement”, we will explore a few of the issues which we have encountered with respect to anti-money laundering accounts operated by third-party fund administrators.
While there has been much industry focus on the re-energised Irish Investment Limited Partnership vehicle, the ICAV remains the workhorse, or perhaps more accurately the stallion, of Irish Fund structures. We have set out a brief reminder of some of the ICAV’s key features and some points to remember for finance transactions.
Wes Misson provided insights into EverBank’s recent launch of a fund finance division led by Jeff Johnston and Cadwalader alum Mike Mascia to the American Banker, which published an article on the development yesterday. You can read it here.
One-month term SOFR ramped up from less than 10 bps in the Spring of 2022 to around 5.33% now. Not surprisingly, higher subscription facility cost of funds can affect fund performance metrics. In The Changing Landscape of Capital Call Facilities published this week, Pitchbook analysts take a look at the IRR and TVPI sensitivities to SOFR levels, concluding that smaller facilities and increased use of hybrid facilities may be possible market adaptions to the current environment.
Are you registered yet? Join us for our seventh Annual Finance Forum on October 19 at The Ritz-Carlton in Charlotte. We would love to see you there!
Leaders from over 150 of the world’s top financial institutions are registered for an interactive day with the industry’s foremost experts. We are going to take deep dives into the wide range of challenges and opportunities that will shape the global financial landscape in 2024 and beyond.
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FFA University 1.0 is less than a week away! This all-day virtual training session is designed for both bankers and lawyers transacting under U.S. law who are either relatively new to Fund Finance or those who want an in-depth training course.