Anzere Advisory
General Partners are increasing their personal commitments, expecting to commit an average of 3.3 per cent to their next fund, according to Investec Fund Finance’s latest GP Trends report.
With fund raises coming around more often, partners and teams are struggling to find the capital to fully fund their upcoming commitments. Using a finance facility secured against those commitments helps to plug the gap.
The market for GP commitment facilities is fairly opaque with banks offering them to only their best clients and it is often used as a relationship enhancer. For smaller or less established funds, this is a challenge because they don’t have those strong relationships.
"The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small, manageable tasks, and then starting on the first one. — Mark Twain"
Lending against GP co-invests is capital intensive so banks see this as difficult business to write and so the terms can be very different from bank to bank.
"Real courage is when you know you’re licked before you begin, but you begin anyway and see it through no matter what. – Harper Lee"
The GP co-invest market is very opaque and pricing can vary widely between providers based on lots of different factors. Our role is to focus attention on to those factors that contribute meaningfully. We have built proprietary models that can be used to help you determine the costs and benefits of leverage to the GP.
"We are, as a species, addicted to story. Even when the body goes to sleep, the mind stays up all night, telling itself stories. - Jonathan Gottschall"
We have those conversations that you don't want to with potential lenders and help to tell the story of your GP and how this will benefit partners going forward. Lending to GPs is as much about building strong relationships as it is about the deal itself and we capture this in our core discussions with lenders.
"Amnesty is as good for those who give it as for those who receive it. It has the admirable quality of bestowing mercy on both sides. - Victor Hugo"
We work to complete the facility within the timelines set out and will help to push further if specific deadlines crop up during the process. We help to transition the relationship so that going forward you are in the best position to work with providers.
We approach banks on a no-name basis to get an initial read on appetite and to provide an initial filter.
We work with you to find the most compatible structure incorporating security vs terms.
We liaise with the banks and put your story across to them, maximising the potential outcome for both sides and resulting in the best terms available.
Lastly, we run the deal through to legals, helping you along the way like suggesting good counsel or pushing timelines to hit a deadline.
