Secondary
Transactions
Solutions for GPs
As the private equity industry matures, an
increasing number of funds are exceeding their
partnership terms and in many cases their extension
periods. Most of these funds have little remaining
net asset value with a small number of residual
portfolio holdings. Consequently, they require
excessive GP time commitment, oversight, management
and administrative and reporting resources relative to their small
value.
PEI provides a variety of solutions for General
Partners of mature funds and funds-of-funds,
including:
- Cash Purchase. The purchase of all
the remaining interests in the fund or
fund-of-funds for cash, providing instant
liquidity to investors and an expeditious
termination of the fund.
- Tender Offer. This approach provides
for the purchase of any and all LP interests in
a fund. Sometimes a situation arises where
a partnership is nearing the end of its term,
but the portfolio still retains value and the
portfolio companies require ongoing active GP
management. A tender offer allows the GP
to provide their LPs with a cash alternative to
the extension of the mature fund.
- Restructuring. Occasionally it
becomes desirable for a General Partner to
restructure the GP composition and agreement due
to changing circumstances of individual or
institutional members of the GP. In many cases,
availability of additional funding to support
portfolio companies may also be desirable. PEI
provides individualized and creative solutions
to situations of this nature, working with the
GP to create a satisfactory solution for the GP
and LPs alike.
If you are a general partner of a private equity
fund or fund of funds and are interested in:
- A strategic exit for older funds, allowing
you to focus attention on new and larger funds
and investments
- Reducing the administrative burden of
managing older funds and LP relationships
- Providing liquidity options for LPs in your
older funds
- An exit alternative for portfolio holdings
when capital markets are tight
- Learning about fund restructuring
alternatives
Contact one of
PEI’s investment professionals today.
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