terms & conditions

Guidance announced this week on how subscription lines should be used by fund managers comes at a time when the industry is getting to grips with best practice on this now controversial issue.

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Just 28% plan to increase their exposure to the asset class, down from 39% six months ago, the firm’s latest survey has found.

Demand for subscription credit lines is now being driven by the needs of separate accounts, say Jeff Johnston and Mike Mascia of the Fund Finance Association.

The €16bn Fund VII commanded €30bn of interest, despite a 6 percent hurdle rate and no early-bird discount.

The €16bn fund, the largest euro-denominated vehicle in private equity history, includes a €500m GP commitment.

Some investors are in favour of reducing the frequency of capital drawdowns, but many are concerned about the risks of extending loan periods.

Olivier Carcy, who oversees a $3.2bn private equity programme at wealth manager Indosuez, said LPs should be compensated for the use of their credit rating.

Per Olofsson, head of alternative investments at the Swedish pension fund, said subscription credit lines should be used for capital efficiency and not to artificially boost IRRs.

A number of US states are seeking to follow California in mandating public funds to disclose carried interest paid to GPs.