Our fund financing team works hand-in-hand with the investment funds team to ensure a global and comprehensive approach in connection with fund financing work.
Our clients
We have extensive experience in advising clients (both borrower and lender) in connection with fund financing transactions, which range from subscription line, asset backed (NAV based), or GP line credit facilities to umbrella facilities and the related security packages (including guarantees).
Our services
When acting on the side of both the lender and the borrower on a financing transaction, we carry out a due diligence of the fund documents, which will typically cover the following items:
- interaction between the general partner, the AIFM and/or investment/portfolio manager, delegation of rights by the general partner (especially as regards entry into financing transactions and exercise of capital call rights to limited partners) and any impact on the security package structuring, corporate authorisations and the financing documentation
- cross-collateralisation between parallel funds and co-investment vehicles
- security perfection issues (e.g. location of bank account and governing law applicable to the security over such bank account, sub-deposit of assets subject to security and assessment of potential impact on governing law of security and/or perfection formalities) and notification to limited partners for security over undrawn commitments
- restrictions in limited partnership agreements on granting security or guarantees to the lender
- restrictions in subscription agreements and side letters on effective enforcement of security package (e.g. rights of counterclaims of limited partners, restrictions as to exercise by lender of capital call rights)
- restrictions in depositary/AIFM/investment or portfolio management agreements on granting security or guarantees to the lender (e.g. request for prior consent of depositary, pre-existing right of pledge of depositary/AIFM/manager)
For the lender, our fund financing team role also includes advice on, drafting and negotiation in the financing documentation of representations, undertakings and events of default specific to the type of fund involved (e.g. RAIF, SIF, SICAR, Part II UCI). We will also draft and negotiate the security package and provide financial collateral arrangements advice and analysis.
When instructed for the borrower, our fund financing team will negotiate the financing documentation, with a specific focus on the representations, undertakings and events of default. Our team will also assist borrowers in the negotiation of the security package.
In addition, at the set-up stage of the fund, our fund financing team assists our investment funds team to anticipate in the fund documentation the recourse to third-party financing (and the granting of security) by building in the provisions usually expected by lenders in financing transactions.
We have deep knowledge of industry trends and have established relationships with all major law firms in Luxembourg.
