Fund Finance: Take notice
19 October 2020
In the context of private equity fund finance, the customary security framework involving the assignment of the partnership's right (acting through its general partner) to call upon limited partners for payment of their uncalled capital commitments, to receive such payments when made and to apply the monies against amounts owing to the lender under the facility agreement, is well understood by borrowers and lenders. However, notice of such security can often be a source of contentious negotiation as the parties seek to blend law and practice into a commercially acceptable solution. This update considers how to reconcile the law with commercial practice in such circumstances.