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Private equity: developments in subscription line lending

Author(s): Chris Barnett, Brett Anderson, Isabella Casciola, John Groenewegen

Dec 11, 2023

In recent years, subscription line facilities have become a well-accepted tool used by private equity sponsors to manage their liquidity, reduce and bring a regular cadence to capital calls, and enhance investment returns.

Subscription lines, which are also referred to as capital call facilities, are revolving credit facilities that are secured not by a traditional collateral pool, but by the undrawn capital commitments of investors in a fund. Although these facilities are now an established fixture of private equity funds across all asset classes, their use is broadening as a result of challenging fundraising, credit and M&A markets. We anticipate that their use will continue to evolve...

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