One of the most important aspects in arranging any fund finance
transaction is structuring the security package.
Even a "simple" private fund structure chart often
includes several entity types, such as limited partnerships and
limited liability companies, organised in multiple jurisdictions
like the Cayman Islands, the United States, and Europe , for
example. The type of facility, whether it is a subscription
facility, a NAV facility, or a hybrid facility, determines the
collateral pledged. This collateral may be provided by one or more
of these entities to secure the repayment obligation to the lenders
or a security agent on their behalf.
For the purposes of this article, we will discuss fund finance
securities for private equity funds in the Cayman Islands under The
Private Funds Act (As Revised) (PF Act).
