Calling All Commitments – Capital Call Security Over Debt Commitments From A Cayman Islands Perspective

From a Cayman Islands perspective, capital call or subscription line credit facilities generally follow a well-trodden path. This path allows the Cayman Islands aspects of such deals to be agreed and completed efficiently.

A new market trend in the subscription financing space, which Walkers has been at the forefront of, has raised some interesting considerations from a Cayman Islands perspective. This trend features private equity funds formed by way of exempted limited partnerships with investors having made capital commitments which are comprised not only of the traditional equity commitments to the fund, but also debt commitments (sometimes comprising as much as 90% of the overall commitment). Walkers' fund formation team has formed several such funds, which cater to insurance-related investors and seek to address the unique regulatory requirements which apply to such investors and their investment strategies.