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Management Fee Subordination: Potential Issues with Subscription Credit Facilities and Management Fee Lines of Credit

26 September 2016
Fund Finance Market Review - Fall 2016
A management fee credit facility (a “Management Fee Facility”) is a loan made by a bank or other financial institution (a “Lender”) to the management company or investment advisor (collectively, a “Management Company”) that is typically the sponsor (or affiliated therewith) (a “Sponsor”) of a private equity fund (a “Fund”). The Lender under a Management Fee Facility is typically secured by, among other things, a pledge from the general partner (the “General Partner”) or Management Company of its rights to receive management fees under the Fund’s limited partnership agreement (a “Partnership Agreement”) or other applicable management or investment advisory agreement.


  • Jonathan R. Rosaluk
    T +1 312 701 8096
  • Mark C. Dempsey
    T +1 312 701 7484
  • Frank A. Falbo
    T +1 312 701 7485
  • Zachary K. Barnett
    T +1 312 701 8841
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