Developments In Capital Call Subscription Facilities: 2017 Year In Review

Capital call subscription credit facilities have become increasingly popular in recent years among private fund sponsors and investors. The primary purpose of these facilities is to enable the fund borrower to make investments without the need to make frequent or relatively small capital calls from investors.

The increased popularity of these facilities has spurred a heightened level of scrutiny from investors and regulators, as evidenced by the recent uptick in media coverage of these facilities. In response to intensified debate, the Institutional Limited Partners Association ("ILPA") earlier this year issued a set of guidelines for the use of capital call subscription facilities. ¹