Deal Announcement: showcasing our flexible approach to GP financing
Balance Strategic Capital has closed a bespoke £23m GP facility to a global VC fund manager. This transaction provides long-term financing underwritten to a broad collateral pool.
The client need:
A financing solution to support their ambitious growth objectives, including:
Platform expansion into new strategies
GP commitment to current and future funds.
Even with healthy management fee income, the target debt quantum required a lender to underwrite beyond management fees alone.
Our solution:
Our ability to underwrite against a broad collateral pool facilitated a greater loan quantum and our flexibility as to use of proceeds enabled the manager to use the facility for multiple financing needs.
£23m facility:
£15m day one committed multi-draw term loan facility + £8m accordion option.
7-year term:
4-year interest only followed by 3-year amortisation.
Extension options at lender's consent and accession mechanics are built in to support the financing needs of future funds.
Broad collateral:
Underwritten to management fees, GP co-investment positions and carried interest for current and future funds.
Cashflow and NAV-based covenants work dynamically in order to maximise the collateral value.
Client outcome:
This unique financing will allow the manager to continue growing their platform and meet the ongoing GP commitment requirements of new fund raises without having to wait for capital to materialise from asset disposals. The flexible nature of this structure anticipates future funding needs and allows the facility to grow with the client over time.
“We chose to work with Balance Strategic Capital because they truly understand the complex liquidity dynamics of a scaling venture capital firm. By underwriting across a broad collateral pool, they provided us with a bespoke, hybrid financing solution. This highly flexible facility gives us the optimal runway to fund our GP commitments and aggressively expand our platform into new strategies, without having to rely on the timing of asset realisations”
— General Partner & CFO, Global VC Fund Manager
For more information on our recently closed transactions: