Key Takeaways:
- Closed-end private equity funds do not immediately cease to exist at the end of their stated term, and subscription-secured credit facilities ("Subline Facilities") can be extended to funds past their term with proper diligence, structuring, and underwriting.
- Delaware law supports that limited partners' capital obligations continue through a fund's winding-up period, subject to any specific requirements under the fund’s limited partnership agreement ("LPA").
- Lenders should ensure LPAs allow late-stage Subline Facilities by reviewing obligations, collateral, and repayment structures.
- Increased demand for late-term Subline Facilities may arise due to challenging exit environments.
Click here to read the full article and learn about the life cycles of closed-end funds and how subscription-secured facilities can be extended to funds past their term with proper diligence, structuring and underwriting.
