An Ideal Domicile For Deal-By-Deal Structures

A recent article in the Financial Times (Private equity turns to new fundraising tactics in tough market, 21 February 2024) highlights a growing trend we have been seeing for some time: bespoke structures set up for single asset (deal-by-deal) acquisitions.

In our experience, these are used for a variety of reasons, including:

• continuation vehicles, extending the holding period for assets once a flagship fund comes to the end of its life and is required to liquidate its portfolio, thereby providing further time for a sponsor to maximise returns;
• "warehousing", where an immediately available asset is acquired during the fundraising period for a flagship fund (and often transferred to the flagship fund once fundraising is complete);