Securely Bridging The Gap – Lending To Guernsey Private Equity Funds

Whilst lenders may have tightened up on their lending, there still appears to be appetite amongst lenders to provide funding to funds. In particular we have seen a number of transactions involving private equity funds and the provision of equity bridge facilities (also known as capital call facilities).

Private equity funds, unlike other types of funds, do not require investors to invest their monies at the launch of a fund. The funds are often structured as Guernsey limited partnerships and the investors make a capital commitment to invest a certain sum of money into the private equity fund over its investment period. Once the private equity fund has sufficient capital commitments, it will hold a series of closings, where, once it has identified suitable investments, it will draw down on the capital commitments of the investors in trances and the investors will be bound by the provisions of the limited partnership agreement to invest that money as they have committed