![]() They are usually a collection of first lien bank loans to companies and ranked below investment grade. CLOĬollateralised loan obligations are single securities backed by a pool of debt. ![]() Repayment terms are negotiated at the start of the loan and the company’s revenue and income will determine how long it will take to repay it. ![]() Royalty financingĪ company receives money from the GP based on future revenue and the GP receives a proportion of the company’s revenue in return. The GP invests into third-party private debt funds, rather than directly lending to, or acquiring the debt of, a company. No collateral is required because this type of firm does not usually have substantial assets, but venture debt financing is typically provided to firms that have already completed several rounds of equity fundraising. Venture debtĭebt financing for early stage companies or start-ups, which is often complementary to equity venture investing. As per PDI’s definition, special situation vehicles are also considered as part of the distressed space. Even if bankruptcy occurs, investors can often still profit. GPs always purchase distressed debt at a discount, and usually the goal is to gain control of a company once it has turned around, although not all distressed funds aim to control a company. The securities of a company that has defaulted or is on the verge of bankruptcy the company has too much debt to continue operating. The strategy combines senior-style risk with subordinated-style returns. UnitrancheĪ hybrid of senior debt and subordinated debt with a blended interest rate that falls between the two. It is often associated with acquisitions and buyouts because it can be used to prioritise new owners over existing owners in the event of bankruptcy, but it is not always the case that debt will be converted to equity. Mezzanine debt is a form of subordinated capital that often has equity-like instruments associated with it. In the event of liquidation, a company must pay back its senior debt before its subordinated debt. Subordinated debt ranks below senior debt in priority. When a company borrows money, it must repay this debt first. The most secure form of debt as it takes priority over other unsecured or more junior debt in the issuer’s capital structure and is usually collateralised by assets. We hold the following information about limited partners on our Database: assets under management, current and target allocation to alternative asset classes including private debt, contact details, current allocation preferences by geography, strategy and sector, appetite for future fund investments, and current and historic fund commitments. Qualified investors must have limited liquidity options and the fund manager must have full discretion over investments made. We do not track any investor capital dedicated to a strategy of investing directly into the debt of or lending to private businesses, property of infrastructure projects. We track investors that commit capital to closed-ended or open-ended funds managed by general partners. For funds that receive commitments from HNWIs and institutional investors, we would add the fund and the institutional investors to the Database but not the HNWIs. As our primary goal is to track how institutional capital is being invested, our listing of limited partners in the Database does not extend to high-net-worth individuals (HNWIs) – many of whom invest via family offices, which we do include – or crowd-funding platforms. LPs can include corporates, family offices, foundations and endowments, insurance companies, investment firms, pension funds, banks, sovereign wealth funds, fund of fund managers and other select institutional investors. A limited partner (LP) is an institutional investor that commits capital to private funds through limited partnerships.
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