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OakNorth Bank has completed a revolving credit line with Bluegem Capital Partners, marking the lender's entry to the private equity fund finance market.
The London-based lender is working alongside a 'significant' American institutional investor, PEI understands.
The latest guidance from the LP body encourages GPs to disclose net IRR with and without the use of such facilities, in addition to the methodology used to reach that figure.
As an example of the practice surfaces, an industry body is warning other companies not to use the covid-19 outbreak as an excuse to try and raise additional finance through flexible documentation.
Drawdowns could enable managers to pre-empt liquidity issues arising from the pandemic but may compound the problem for certain LPs.
It’s a booming market that’s been synonymous with the banks in recent years, but a new source of capital has appeared on the scene.
Growing demands from GPs and investors have seen the market evolve rapidly in recent years.
GPs can avoid potential liquidity issues by drawing down loans early and performing greater due diligence on their lenders.
GPs must think carefully about how fund-level leverage affects performance at the fund level and, by extension, their own stability, writes veteran investor Neil Harper.
GPs are increasingly looking to raise or release equity against their management companies. But what are their options, asks Investec Fund Finance’s Slade Spalding.