Cayman Ultimate General Partners In Subscription Facilities: Do They Ultimately Matter?

In subscription finance transactions where the borrower or another pledgor entity (such as a feeder fund or guarantor) is a Delaware limited partnership or a Cayman Islands exempted limited partnership (ELP), the role of the general partner (GP) is well understood and regarded as fundamental to the security structure. The GP is the entity that exercises the right to call capital from investors and typically grants security over those rights in connection with the facility.

Given the GP's importance, it is commonly included as a party to the credit agreement and treated as a "Credit Party," meaning that it is subject to the standard suite of representations, covenants, and other obligations under the facility. The GP also signs the security agreement in its own right as a pledgor.