HFLR Program Provides Overview of Five Financing Options Available to Private Funds (Part One of Two)

Depending on the nature of their operations, strategies and investments, private fund managers have access to a number of different sources of financing. A recent webinar presented by the Hedge Fund Law Report provided an overview of the following types of financing arrangements used by private funds: total return swap (TRS) financing, structured repurchase agreements (repos), prime broker (PB) financing, special purpose vehicle (SPV) financing and subscription credit facilities. The program was moderated by Kara Bingham, Associate Editor of the Hedge Fund Law Report, and featured Fabien Carruzzo, partner at Kramer Levin; Matthew K. Kerfoot, partner at Dechert; and Jeff Johnston, managing director at Wells Fargo Securities, LLC. This article, the first in a two-part series, explores basic principles of financing arrangements and provides an overview of PB financing and TRS financing. The second article will provide an in-depth discussion of structured repos, SPV financing and subscription credit facilities. See “Types, Terms and Negotiation Points of Short- and Long-Term Financing Available to Hedge Fund Managers” (Mar. 16, 2017).

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