When investors default – part 2: prevention is the best remedy

In last month’s article, we looked at what happens when an investor in a private equity fund defaults on its obligation to meet capital calls. In this article, we examine some of the other issues arising from an LP default for the fund, its manager, investors and financial regulators. If an investor fails to meet…

When investors default – part 1: commitments and consequences

In this article, the first of two (click here to read the follow up article), we look at what happens when an investor in a private equity fund defaults on its obligation to meet drawdown requests; the effects of a default on the fund manager and the other investors; and the tools available to the…

GP-led secondaries: Everything you wanted to know but were afraid to ask

Secondaries have been a hot topic in private equity in recent years. The first secondaries fund in history raised a mere $6 million in capital back in 1981. Forty years later, the biggest secondaries fund of all, managed by Ardian, has $19 billion in capital. In 2020 alone, secondaries funds raised $100 billion. Four of…

GP stakes investing: Part 1 – taking private equity exposure to the next level

An investor looking for exposure to alternative assets generally invests in alternative investment funds and may also co-invest in the funds’ portfolio companies. But a third option has hove into the public spotlight in the last decade: investing in the fund managers themselves. This is a relatively new and fast-growing part of the asset class…

Private funds ten-year top ten: biggest changes of the decade

This month, MJ Hudson celebrated its 10th birthday; one full decade. So, for this latest article, we thought we’d enter into the spirit of the occasion by spotlighting the 10 biggest changes we have observed in the private equity funds market, over the last 10 years: 1. The industry got a lot bigger… With interest…

The new Corporate Insolvency and Governance Act 2020: 10 of your questions answered

There has been much focus in the corporate and insolvency world on the Corporate Insolvency and Governance Act (the “Act”) which made its way through the UK legislative process at breakneck speed and entered into force on 26 June 2020. The Act introduces both permanent, ground-breaking reforms to corporate insolvency law, including the introduction of…

What can secondaries do for LPs and GPs?

Secondaries can help with LPs and GPs that are going to need ways to confront and resolve the particular challenges imposed on them by the coronavirus-induced economic crisis: As has been widely reported, many portfolio companies are severely impacted and in desperate need of cash. Private equity-backed companies do have access to the parent fund’s…

Alternative liquidity management

As covered in a previous article, the tools that manage how and when investor money is returned have always been a part of the fund documentation for liquid alternative strategies. These liquidity management tools were road tested extensively between 2008 and 2011 and the result is a far better understanding of how best to use…

We need to talk about COVID-19 (but we may not be sure how)

It was only last month that I wrote to you with advice on how to talk to your investors about Brexit. Well, a month is a long time in private equity, it seems, and Brexit already feels like old news. “Unprecedented” is the word most conspicuously deployed to describe the current environment, and your familiarity…

Why are you still trading in-house?

We think now is a good time to evaluate whether an internal dealing desk is a good use of resources or if focus would be better placed on core business activities. Why should you reevaluate?  Regulatory, market and financial pressures continue to erode traditional asset management industry margins. These pressures have promoted many to consider…

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