A market leading German Private Equity Fund, engaged Anzere Advisory, to assist in the search for the right financing solution on a Subscription facility for their 9thFund with a target size of EUR 500m. Anzere Advisory identified potential lenders, running a competitive process, and helped facilitate the initial discussions between banks and the private equity firm.
The fund had already received an offer from a bank agreeing to provide a subscription line of credit of $100 million, on a 1-year term with a competitive interest rate, arrangement fee and commitment fee. However, the Fund wanted to achieve even better value for their LPs and so retained Anzere Advisory to run a whole of market process for them. Anzere Advisory quickly recognised that the margin rate offered was highly contingent on the opaque nature of some of the key underlying investors, affecting the overall collateral pool.
Thanks to Anzere Advisory’s negotiation skills, the additional due diligence carried out to retain further information from key investors and the competition from additional lenders, they were able to successfully reduce the margin by 30basis points from the bank that offered the original terms to the fund. They were also able to reduce the arrangement fee by 5 basis points and commitment fee by the same resulting in an overall saving of EUR 350k per annum for the fund’s LPs.
Anzere Advisory worked with the parties until finalization of the subscription line agreement and other related documents, pushing for the tight deadline set by the fund to enable them to utilise the facility for their second fund investment.
The successful completion of the private equity subscription line was a testament Anzere Advisory's expertise, guidance, and negotiation skills throughout the financing process helping to ensure a smooth and successful outcome for all parties. The successful negotiation of a lower margin rate by Anzere Advisory resulted insignificant savings for the private equity firm, allowing it to allocate more capital to its investments and generate higher returns for its limited partners.
The successful completion of a private equity subscription line for the fund was a critical step in the private equity firm's growth and success, allowing it to continue pursuing attractive investment opportunities and delivering value to its limited partners. Anzere Advisory's role in facilitating the structuring of a subscription line for a German domiciled fund and negotiating a lower margin rate was an important part of this success, highlighting the value of using an advisor such as Anzere Advisory.
