Islands at the vanguard – the implications of the capital call facilities explosion in the Cayman Islands
The continued and expanding popularity of capital call facilities to private equity funds in Cayman is largely due to their strong performance during the financial crisis, with very few reported incidents of investor defaults. In addition, the attraction of relatively low-priced financing (many such facilities are advanced on an uncommitted basis) is appealing to borrowers and the perceived low-risk nature of these facilities is attractive to several specialised lenders that operate within this market. The Cayman Islands has long been a domicile of choice for private equity fund formation and is therefore on the cutting edge of the ever-evolving world of capital call financing. While traditionally utilised by private equity funds to bridge the period between the time notice is served on investors instigating a capital call and the receipt of the resulting proceeds, such facilities have become increasingly used as part of a fund's investment strategy to make underlying investments.
With the Cayman Islands at the cutting edge of the capital call facilities explosion, Rob Jackson and Justin Hart look at the issues for lenders and their counsels
This premium content is reserved for
Legal Week Subscribers.
Subscribe today and get 10% off.
A PREMIUM SUBSCRIPTION PROVIDES:
- Trusted insight, news and analysis from the UK and across the globe
- Connections to senior business lawyers within the leading law firms and legal departments
- Unique access to ALM's unrivalled, market-leading reporting in the US and Asia and cutting-edge research, including Legal Week's UK Top 50 and Global 100 rankings
- The Legal Week Daily News Alert, Editor's Highlights, and Breaking News digital newsletters and more, plus a choice of over 70 ALM newsletters
- Optimized access on all of your devices: desktop, tablet and mobile
- Complete access to the site's full archive of more than 56,000 articles
Already have an account? Sign In Now
For enterprise-wide or corporate enquiries, please contact Paul Reeves on Preeves@alm.com or call on +44 (0) 203 875 0651