Asset Management

On 14 May 2020, the UK Financial Conduct Authority (“FCA”) published its final guidance for insurance and premium finance firms, in relation to the fair treatment of customers who are in temporary financial difficulty resulting from the current COVID-19 pandemic. The guidance and associated rules subsequently came into effect on 18 May 2020 and will be reviewed within 3 months of the same in light of any further developments around the current circumstances. Firms for which this guidance is relevant include the following: insurers; insurance intermediaries (including appointed representatives); premium finance lenders that provide credit to fund the payment of…
Originally published on April 8, 2020. Updated as of May 20, 2020. In an effort to halt the spread of the novel coronavirus Covid-19 (“Covid-19”), on March 14, 2020 the French government mandated a shut-down of non-essential businesses and other venues open to the public. The shut-down ended on May 11, 2020. Among the businesses concerned were retail stores, shopping centers, and restaurants. Businesses were authorized to continue their online activities and related deliveries. The shut-down did not impact businesses that are considered “essential to the life of the nation”, such as food shops, drugstores, banks, and gas stations (the…
We at The Capital Commitment blog have previously discussed several steps for fund managers and others to weather the storm brought by COVID-19.  One of those steps is assessing the likelihood of a carried interest return obligation under a fund agreement’s general partner clawback provision (and planning for how to mitigate those obligations, if necessary).  A recent article from our colleagues in Proskauer’s Private Funds group highlights the important role that general partner clawbacks play in ensuring the economic deal between a fund manager and the fund’s limited partners is protected, regardless of how market disruptions, such as those…
We were proud to collaborate with Private Funds CFO on this article. To view the original, edited version of this article please visit https://www.privatefundscfo.com/. Private fund managers are facing a myriad of issues from COVID-19 market disruptions: portfolio companies with declining revenues, liquidity concerns, CARES Act issues, and difficulty marketing, and securing new investors for, funds currently being raised.  Another area of concern that fund managers should not overlook is the potential for carried interest return obligations under their fund agreements’ general partner clawback provisons. While clawback obligations may not have the same sense of urgency as many of…
Originally posted March 31, 2020. Last updated May 8, 2020. In response to the novel coronavirus (COVID-19) pandemic, the Securities and Exchange Commission and its Staff have provided temporary regulatory relief and guidance to assist a variety of market participants. This document summarizes the SEC’s actions that affect public companies, registered investment companies and registered investment advisors. The SEC Staff is monitoring developments closely and will consider additional relief and guidance from other regulatory requirements for those affected by the coronavirus as conditions warrant. We will update this summary as the SEC takes additional actions. The guide linked below should…
On 1 May 2020, the UK Financial Conduct Authority (“FCA”) published a statement on its website about business interruption (“BI”) insurance cover in light of the current COVID-19 pandemic. The FCA confirmed that it intends to obtain a fast-tracked court declaration to resolve current contractual uncertainty in relation to the same. The issue which the FCA would like to resolve is that there is currently a great lack of clarity and certainty for many businesses making BI claims, and the basis on which insurance firms are subsequently making decisions in relation to whether to pay out on such claims. Due…
The Novel Coronavirus (COVID-19) has significant implications for the asset management industry globally, forcing both sponsors and investors to consider the immediate impact on their investments, and to re-prioritize both immediate and longer term issues.  In the United Kingdom, the Financial Conduct Authority (“FCA”) issued a series of communications to firms to address the impact of COVID-19 on the industry. Despite complexities caused by COVID-19, the FCA warns in its recently published 2020/21 Business Plan that it will remain vigilant to potential misconduct and reminds firms that where it finds poor practice, “[it] will clamp down with all relevant force”.…
The novel coronavirus (COVID-19) global pandemic presents significant challenges for private investment funds and their sponsors. While the situation is constantly evolving, we have set out below some key areas for funds to consider in connection with their existing subscription and asset-based (NAV) credit facilities. Staying ahead of potential defaults There are a number of provisions under subscription and NAV facilities that may be triggered as a result of the economic effects of COVID-19. A fund’s ability to meet its payment obligations under a subscription facility, particularly for a fund that has imminent clean down requirements, may be adversely affected…
The impact of the global coronavirus (COVID-19) outbreak has been rapidly evolving, causing disruption in global commerce across a wide range of industries. Private fund managers are not immune to the disruption. According to PitchBook’s latest analysis, private equity and venture ­­capital still have record amounts of dry powder ($2.4 trillion) to weather the storm and step in to provide liquidity to businesses. However, operations, fundraising, deal sourcing, and performance will likely be negatively affected, at least in the near-term, by the economic deterioration caused by COVID-19.…
The U.S. Securities and Exchange Commission (“SEC”) recently issued an order providing temporary flexibility for certain registered investment companies (“funds”) and certain of their affiliates to enter into short-term borrowing and lending arrangements (the “Order”).[1] The Order is another in a series of steps the SEC has taken to assist financial market participants in addressing the broader market impacts of the coronavirus. Specifically, subject to certain conditions, the Order provides temporary exemptive relief from the Investment Company Act of 1940, as amended (the “1940 Act”), through at least June 30, 2020, that: permits registered open-end management investment companies other…
On Wednesday, March 25, 2020, the U.S. Securities and Exchange Commission (the “SEC”) issued an order under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and an order under the Investment Company Act of 1940, as amended (the “Investment Company Act”) extending the period for which previously-granted conditional relief is available, as summarized in the chart below. The previously-granted relief was announced on March 13, 2020 and provided exemptions related to (i) certain filing and delivery requirements for investment advisers, registered investment companies and business development companies (“BDCs”) and; (ii) in-person board meeting requirements for registered investment…
The novel Coronavirus (“COVID-19”) has already had a global impact and will continue to have significant implications on the global financial services industry. With this in mind, the UK Financial Conduct Authority (“FCA”) has issued various communications in order to emphasise the need for business continuity at financial services firms and guidance on how to ensure that is the case. In its recent statement of 17 March 2020 the FCA confirms that it remains focused on business continuity plans for financial institutions and will expect regulated firms to take all reasonable steps to continue meeting their regulatory obligations. Firms will…
I. Introduction As COVID-19 continues to spread around the world, it has become apparent that it is having a significant impact on the global financial market, at least for the short- to medium-term. While the only constant is change, there are steps private fund managers can take that will help them weather the storm and best position themselves for the future. II. Fundraising A. Timing. As of this writing, international travel restrictions are in place in numerous countries across the globe, already delaying in-person meetings between fund managers and investors, as well as slowing down the investment process for investors,…
On Friday, March 13, 2020, the U.S. Securities and Exchange Commission (“SEC”) announced the issuance of a pair of exemptive orders providing conditional relief for investment advisers, registered investment companies and business development companies (“BDCs”) (together with registered investment companies, “funds”) whose operations may be affected by the COVID-19 virus. The relief covers certain filing and delivery requirements for investment advisers and in-person board meetings and certain filing and delivery requirements for funds. Relief under the Investment Advisers Act The order (the “IAA Order”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), provides a 45-day extension…
Exemptive Relief The Securities and Exchange Commission (SEC) has issued an order (Order) providing temporary exemptive relief to public companies that are unable to meet filing deadlines due to circumstances related to novel coronavirus (COVID-19). Companies that satisfy the conditions in the Order will have an additional 45 days to file certain disclosure reports, including quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, and proxy statements. The time period for the relief is from March 1, 2020 to April 30, 2020. Conditions The exemptive relief is subject to a number of conditions outlined…