Newsletter: Impact of Credit Lines on Carry

In Part I of this publication, we have discussed the impact of subscription lines of credit on the Net IRR and the potential distortion of the ‘Fee Drag’ (resulting in a negative ‘Fee Drag’) rendering the Gross IRR/Net IRR analysis in certain situations quasi-useless due to the fact that the Net IRR may turn out to be higher than the Gross IRR, in addition to the time mismatch between Gross and Net IRRs.

Click here to read part II where we discuss the impact of subscription lines of credit on carried interest.

Newsletter: Impact of Credit Lines on IRR

Over the past few months we have witnessed a brewing debate amongst investors/Limited Partners (LPs) on the use of subscription lines of credit (at the fund level), also referred to as ‘drawdown/capital call facilities’, 'bridge financing’, ‘bridge facilities’, ‘subscription lines’ and a number of other variations along these lines.

In the latest newsletter, we review the impact on and appropriateness of the IRR as a performance metric in the context of using credit facilities.

Read it here.

Newsletter: Fee Transparency and Carried Interest

It has been a busy 2016 year-end and even busier quarter for us recalculating carried interest for Limited Partners (LP) clients. Carry validation is becoming more and more popular with LPs due to the pressure from various stakeholders such as trustees, retirees (in the case of public pension plans), regulators, the general public, the media and other stake holders, and in some states in the US even fee transparency legislation has been passed as a result of the public interest in the matter. 

In the latest newsletter, we review the six most common reasons for variances between LP carry estimates and GP-provided carry numbers found during LP carry recalculation. 

Read it here.

Newsletter: The New California Legislation Regarding Fee Transparency Explained

AcordIQ General Partner Mariya Stefanova explains the new California legislation regarding fee transparency and its implications on LPs and GPs. 

"The intent of the new legislation is to increase the transparency of fees paid by ‘Public Investment Funds’ (PIFs) to Alternative Investment Vehicles (AIVs). What prompts the need for more fee transparency is the fact that the public investment funds pay significant amounts of fees to AIVs, but don’t necessarily receive significant amount of information regarding the character and amount of those fees.."

Download the newsletter here and contact AcordIQ for more information about our fee transparency and validation solutions and services.