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8th Annual European Fund Finance Symposium: The Latest From London May 2024 - Equity Commitment Letters – A Refresher

We have recently seen a notable uptick in the usage of equity commitment letters (ECLs) in fund finance transactions and have been spending an increasing amount of time discussing their merits with our clients’ credit teams....more

NAV Positivity April 2024 - In Defense of NAV Loans

NAV loans are getting constant coverage in the press now. For those of us that spent years trying to direct focus to the potential of NAV lending, this is a welcome development.  Admittedly, not all of the coverage is...more

NAVember November 2023 - U.S. NAV Finance Market Update – What a Year!

It’s already been two weeks since we wrapped up the Cadwalader Finance Forum in Charlotte, which featured a panel on “New Approaches in the NAV and Secondary Market.” The panelists provided attendees with an entertaining and...more

Unlocking the Hybrid October 2023 - Continuation Funds and the Hybrid Solution

It has been a common refrain in the fund finance industry that “hybrid” loan facilities (i.e., loans underwritten on the basis of both a fund’s investor capital commitments and its investment portfolio) are constantly talked...more

Portfolio Purchase Pointers July 2023 - NAV Acquisition Finance for Secondaries Facilities

In the private equity secondaries market, financing is often used to facilitate the purchase of portfolios of interests in private equity funds. These transactions require lenders to underwrite the value of assets that the...more

A Quick Take on a Sudden Change in the Banking Landscape

A lot of ink has been spilled in the last 72 hours regarding the historic developments involving Silicon Valley Bank and Signature Bank. Our quick summary of the facts and law is below. Cadwalader will continue to monitor...more

Muddled Macros - September 2022 | Issue No. 193 - NAV Facilities – The Swiss Army Knife of the Fund Finance Market

We continue to see significant interest in NAV financing products in both the U.S. and European markets, which is reflected in double digit year-over-year growth in our deal activity for these facilities to date. As compared...more

Breaking Bad - May 2022 | Issue No. 176 - Assessing ‘Bad Acts’ Risk in NAV Facilities (Part 1 of 2)

One aspect of NAV loans that lenders often focus on is the risk of “bad acts” by a borrower with respect to the investments that underpin the loans. For our purposes, NAV loans are loans to alternative investment entities...more

Searching for Dragons to Slay - March 2022 | Issue No. 167: ‘NAV’igating Cayman LP Interest Security – Lender FAQs

As noted in our previous update, “‘NAV’igating Cayman Share Security – Lender FAQs,” fund finance lenders are increasingly encountering pledges of shares in SPVs incorporated in the Cayman Islands as part of the collateral...more

And the Beat Goes On - January 2022 | Issue No. 157 - NAV Finance Market Update

Between Omicron, the holidays, and down-to-the-wire end-of-year closings, it was a hectic finish to 2021. But now that the calendar reads 2022, we wanted to reflect this week on the state of the NAV finance market and provide...more

Just the FAQs - December 2021 | Issue No. 154 - ‘NAV’igating Cayman Share Security – Lender FAQs

As the universe of asset-based and hybrid facilities continues to expand, fund finance lenders are increasingly encountering pledges of equity interests issued by funds or SPVs domiciled in popular jurisdictions outside of...more

NAV Meets Pref August 2021 | Issue No. 141 - NAV Financing for Pref Shares

Over the past 18 months, as we have previously discussed, use by private equity funds of both NAV loans and preferred equity solutions has increased. For our purposes, NAV loans are loans to private equity funds that are...more

Considerations for Post-IPO NAV Financing

With a surge in asset-based lending to private equity funds since the start of the pandemic and a historic run of IPO fundraising, it is not surprising that we are increasingly seeing post-IPO shares being pledged as...more

Key Issues for Loans to ’40 Act Funds

While not as robust as we once anticipated, we have seen a steady flow of financings for alternative investment funds that are registered as investment companies under the U.S. Investment Company Act of 1940 (the “Investment...more

IRS Phases in Section 871(m) Dividend Equivalent Withholding

On December 2, the U.S. Internal Revenue Service issued Notice 2016-76, which phases in the application of withholding on dividend equivalent payments under section 871(m). Under the notice, withholding applies only to...more

12/6/2016  /  Dividends , IRS , Withholding Tax

Proposed QI Agreement Addresses Cascading Withholding on Dividend Equivalents

On July 1, the U.S. Internal Revenue Service issued Notice 2016-42, which proposes changes to the qualified intermediary (QI) agreement to address cascading U.S. withholding tax on dividends and “dividend equivalents”...more

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