Vintage Year
The year in which a fund’s final capital raise occurred, or, for certain funds, the year of a fund’s effective date or the year in which a fund’sinvestment period commences pursuant to its governing agreements.
The year in which a fund’s final capital raise occurred, or, for certain funds, the year of a fund’s effective date or the year in which a fund’sinvestment period commences pursuant to its governing agreements.
Management fees are normally based on “net asset value,” “gross assets,”“adjusted par asset value,” “adjusted cost of all unrealized portfolio investments,” “capital commitments,” “adjusted assets,” “stockholders’ equity,” “investedcapital” or “capital contributions,” each as defined in the applicable management agreement.
Monitoring fees, also referred to as advisory fees, are generally based on the total value of structuredportfolio company investments, which normally includes leverage.
Monitoring fees, also referred to as advisory fees, are generally based on the total value of structuredportfolio company investments, which normally includes leverage.
Carried Interest
In carry fund structures, general partner invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, General partner is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).
In carry fund structures, general partner invests alongside its limited partners in a partnership and is entitled to its pro-rata share of the results of the fund (a “pro-rata allocation”). In addition to a pro-rata allocation, and assuming certain investment returns are achieved, General partner is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).
Credit fund Strategies
There are a wide variety of strategies included within credit funds group. At one end of the spectrum are higher-risk strategies such as distressed debt funds, which invest in the debt of companies in or near bankruptcy. At the other end of the spectrum are "safer" products such as senior loan funds, which as the name implies invest in senior secured loans of typically healthy companies. And then you have a range of strategies – mezzanine loan funds, opportunistic credit funds, CLO funds – that typically slot somewhere in between from a risk-return profile.
There are a wide variety of strategies included within credit funds group. At one end of the spectrum are higher-risk strategies such as distressed debt funds, which invest in the debt of companies in or near bankruptcy. At the other end of the spectrum are "safer" products such as senior loan funds, which as the name implies invest in senior secured loans of typically healthy companies. And then you have a range of strategies – mezzanine loan funds, opportunistic credit funds, CLO funds – that typically slot somewhere in between from a risk-return profile.
SPV
Special purpose vehicles (SPVs) are often established for the purpose of holding specific assets in connection with a secured financing transaction, or in other situations when certain assets are required to be segregated from other assets. These may be consolidated or not consolidated for GAAP purposes, depending on the facts and circumstances of the arrangement.
Special purpose vehicles (SPVs) are often established for the purpose of holding specific assets in connection with a secured financing transaction, or in other situations when certain assets are required to be segregated from other assets. These may be consolidated or not consolidated for GAAP purposes, depending on the facts and circumstances of the arrangement.
A co-investment opportunity is an opportunity to invest alongside (or outside of) a private investment fund in an investment that is too large (or not appropriate) for the private investment fund. These investments are typically less liquid assets.
A sidecar is an investment vehicle established to invest in a co-investment opportunity. Sidecars can be structured to invest in one or more co-investment opportunities, can be blind pool or not, and may be established for a single investor or may be offered to multiple investors.
#sidecar
A sidecar is an investment vehicle established to invest in a co-investment opportunity. Sidecars can be structured to invest in one or more co-investment opportunities, can be blind pool or not, and may be established for a single investor or may be offered to multiple investors.
#sidecar
The secondary market is important given that private equity fund interests are illiquid in nature and are structured to be long-term investments (the life of a PE fund is generally 10 years+). The secondary market enables investors to sell their interests & unload the related capital commitment to a buyer at an acceptable price, albeit at a discount to current net asset value.
Managers benefit from the secondary market because the transactions are generally confidential and match a willing buyer with a willing seller (who may be cash strapped or otherwise unhappy with the fund’s operation/investment history). From the buy-side perspective, the most desirable transactions generally involve sellers with liquidity problems, selling significantly funded interests, such that the buyer can better assess future performance.
Managers benefit from the secondary market because the transactions are generally confidential and match a willing buyer with a willing seller (who may be cash strapped or otherwise unhappy with the fund’s operation/investment history). From the buy-side perspective, the most desirable transactions generally involve sellers with liquidity problems, selling significantly funded interests, such that the buyer can better assess future performance.