At Reed Smith, we’re considered a market-leader in the area of funds finance; acting for high profile financial institutions that provide capital call/subscription line, NAV, Asset-Backed, Hybrid and other fund facilities to private equity funds, credit funds, infrastructure funds and real estate funds. We have acted on behalf of most of the UK, European and U.S. financial institutions providing these products. We can carry out the same due diligence on the fund borrowers on behalf of the lender, prepare fund specific representations, undertakings and events of default and advise on taking security from partnership and other typical fund structures, including an assignment of the right to draw down loan commitments from investors for you.
We have worked on loans directly to the fund, as well as to the general partners and limited partners of the funds. We also specialize in GP/manager support facilities and co-investment facilities and have dealt with offshore legal counsel in the principal jurisdictions where funds or their general partners are located. So, we can help you wherever you are and wherever your fund interests lie.
Similar to all this, we can provide detailed advice for you on many issues related to subscription and fund finance, including:
UBTI issues and structuring solutions
Cross guarantees between parallel funds, sponsor and co-investment vehicles
Structuring of co-investment facilities, GP and Manager support lines and facilities to LPs
Security perfection issues and notification to limited partners
Excuse rights and confidentiality of side letters
Security assignments and powers of attorney to support facilities and the risks to the lender of having imposed fiduciary duties
Restrictions in limited partnership agreements on granting security to the lender
Interaction between the general partner and investment manager and delegation of rights
Subordination of limited partner commitments to the indebtedness owed to the bank
Structures involving England, Scotland, Guernsey, Spain, Jersey, Cayman, Luxemburg, France, Germany, Marshall Islands, Anguilla, Mauritius and other jurisdictions
We also have an established funds formation group who can assist you with any complicated due diligence issues related to fund borrowers.