Cayman Islands private equity (PE) funds are often established using a Cayman Islands (CI) exempted limited partnership (ELP). It has become increasingly common for an ELP to use credit facilities secured by the right to call and receive capital contributions from its limited partners (LPs) to provide liquidity and enable it to seize investment opportunities.
This article explores key issues that arise when an ELP is putting capital call facilities in place, and explores a possible solution to issues in these transactions.
A challenge in fund financing is balancing the legitimate commercial concerns of the general partner (GP) for confidentiality and not wanting to approach the LPs against the lender’s need for disclosure and certainty of cash flow.
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STACEY OVERHOLT and LORRAINE PAO are partners at Maples and Calder (Hong Kong)
Maples and Calder (Hong Kong)
53/F, The Center, 99 Queen’s Road Central
Tel: +852 3690 7441
Tel: +852 2971 3096