News & Events

Funds Partner Jason Herman was interviewed for a Private Equity Law Report article titled, “How to Use LPACs and Third Party Valuation Providers to Mitigate the Inherent Risks of Captive Debt and Equity Investing.” The article is the first in a two part series focusing on how to identify and mitigate risks associated with pursuing debt and equity investments in the same portfolio company when a sponsor manages private credit funds that provide financing to the portfolio companies of their affiliated private equity funds.

Jason noted, “particularly where private credit funds include a captive investing strategy, significant conflict-mitigation procedures need to be put in place to validate the funds’ actions.” He further explained that, in addition to debt-structuring techniques, common tools credit fund managers often adopt to address conflicts include going to the LP advisory committee (LPAC) for approval and appointing a third-party independent fiduciary.

To read the full article, please click here (subscription required).