Cayman Investor Notices: 5 Key Reminders

The provision of investor notices in capital call facilities involving Cayman funds is very familiar to most participants in the fund finance space. However, the importance of such notices in a subscription line transaction should not be overlooked, particularly for lenders who may be more accustomed to the perfection of security interests by way of UCC filings. We have set out a quick refresher below on five key aspects of the investor notice process in transactions involving Cayman exempted limited partnerships (ELPs).

1. Why is Notice Needed?

For secured subscription line facilities involving ELPs, priority of capital call security is achieved through the delivery of written notice of the grant of the security to the ELP’s limited partners, with priority determined by the order in which such notices are given rather than by the date on which the relevant security interest was created. Accordingly, a delay in providing notice leaves open the possibility that the ELP could grant a