When private fund stakeholders face challenging and high-stakes issues, we are the partner to turn to.
Private equity funds, venture capital funds, hedge funds and fund managers
Institutional investors, including funds of funds, asset management firms, pension systems, endowments, and insurance companies
Private capital fund portfolio companies
Bank and non-bank lenders to private capital funds
Court-appointed fiduciaries in connection with fund insolvencies and wind downs
Parties to high stakes private capital fund litigation and other disputes
For decades, private market alternative asset classes (private equity, venture capital, private credit, real assets, and hedge funds) have attracted investors willing to accept longer periods of illiquidity for higher, uncorrelated returns as part of a diversified asset allocation model.
When functioning properly, these investments can provide higher returns with lower correlation to public markets and serve as a strategy for building long-term wealth.
Global assets under management (AUM) for private markets have grown dramatically over the last fifteen years.
As the industry has matured, holding periods for private capital fund investments have lengthened, and the timeframe for investors to achieve final liquidity from private capital fund investments often exceeds the 10 to 12-year fund term convention for closed-end vehicles. This has strained asset allocation models for institutional investors, especially during economic downturns and challenging exit environments.
To address these challenges, sophisticated solutions have evolved, including a vibrant secondaries market. Initially a tool for institutional investors to generate liquidity by selling interests in late-vintage funds, the secondaries market has expanded to include a range of GP-led structured solutions.
The private credit markets have also responded by accumulating significant dry powder to support portfolio company liquidity needs and to meet the growing demand for NAV loans and other fund finance products designed to address fund liquidity challenges.
Despite significant growth in the secondaries market and the evolving sophistication of secondary solutions and other capital market innovations, these solutions come with complexities and potential conflicts of interest and tend to favor high asset quality situations. There is simply no one-size-fits-all solution for every private capital fund.
As a result, private capital fund managers and investors often face an array of lifecycle issues that they and their governing documents did not adequately anticipate.
In addition to the foregoing lifecycle issues and structural challenges inherent to private market asset classes, the attractive return profile of private capital fund investments can be negatively impacted by common investment risks if not effectively managed. Select common risks associated with private capital fund investments include:
We offer our clients clarity and direction when they are faced with complex challenges involving private capital fund investments.
We help private capital fund stakeholders preserve value and maximize outcomes in circumstances of conflict, distress or transition.
We are experts in evaluating complex situations, analyzing relevant information, and developing and implementing creative solutions to resolve challenges and unlock economic value for our clients.
Additionally, our solutions are designed to address common issues that frequently hinder resolution of complex challenges involving private capital fund investments. Select examples include:
Resolution May Entail Substantial Time and Other Resource Commitments
1Limited Partner Interests are Often Diffuse and Unorganized
2Governing Agreements May Not Provide Effective Rights and Remedies
3Lack of Bandwidth to Implement Solutions
4Active management of challenging private capital fund issues can entail substantial time and other commitments for all parties involved.
Our experienced team assumes a very hands-on role in the coordination and execution of these efforts, working in close coordination with our clients. This proactive approach is a significant benefit as our clients are able to allocate their valuable time and resources to other high utility business priorities, such as fundraising, new investments and portfolio management, while still maximizing investment outcomes through a proactive resolution of their challenging situations.
We coordinate with investors and organize them into functional groups to understand views and priorities and provide advocacy to those parties in communications and negotiations with relevant stakeholders.
Drawing upon our expertise and working in conjunction with legal counsel, we strive to develop creative solutions to complex challenges and to identify and initialize sources of leverage that can be influential in negotiations with relevant stakeholders.
Above all else, we help drive the implementation of solutions to complex challenges involving private capital funds. We do this across a variety of situations and roles, acting either in a principal or advisory capacity.
Select representative roles include:
