Subscription Lines: Opportunities Multiply As They Are Seized

Subscription lines to funds have been hitting the headlines recently. In this article, Fi Dinh, Relationship Director within the Private Equity team at Barclays, alongside Jeremy Cross, Partner, Co-leader of Global Fund Finance at Cadwalader, Wickersham & Taft LLP, take a closer look at the benefits of the subscription line and the concerns expressed in recent publications, and give their views on the future usage.

 Initially used purely for short-term bridging of capital calls, over recent years, subscription lines have become longer term; their range of applications has expanded, ticket sizes have increased, and their use has become more or less ubiquitous, encouraged by both increasing demand by funds wishing to make use of them as well as lenders looking to provide them. Current estimates of market size are that subscription facilities account for around $200bn in the US alone, with significant volume also in the UK and Europe, and increasingly in Asia (Preqin).