Subscription Lines of Credit

Subscription Lines of Credit and Alignment of Interests

Short-term financing to bridge the time between a deal closing and the eventual calling of capital has been a tool utilized by private funds for many years. But in recent years, the practice has been expanding in prevalence and scope. In June 2017, ILPA issued released guidance regarding the risks and potential impact on limited partners resulting from these credit lines, as well as recommendations for greater disclosures and clarity in the partnership agreements around parameters for their use.