ARTICLE
26 September 2023

Alternatives To Raising Private Debt Hurdles

M
Macfarlanes LLP

Contributor

Macfarlanes is a pre-eminent law firm advising a global client base across Private Capital, Private Wealth, M&A and Disputes. We are large enough to handle the most complex and demanding mandates yet focused enough to remain agile and responsive. Our size enables us to know each other well, collaborate seamlessly and adapt quickly to our clients’ evolving needs. Our independence shapes the way we work. We foster genuine partnership, encourage individual responsibility and empower our people to think creatively in pursuit of practical, effective solutions.
This year we have witnessed a significant rise in interest rates to levels not seen since 2009.
United Kingdom Finance and Banking
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This year we have witnessed a significant rise in interest rates to levels not seen since 2009. This is being perceived as a tailwind for private debt funds as they lend at floating rates and, therefore, benefit from higher interest payments when rates rise. In turn, the appropriateness of current hurdle rates is under question as investors view them as "too achievable".

In the second part of this two-part series, we explore alternative options to raising hurdles that seek to address investor concerns and maintain alignment between GPs and LPs.

To view the full article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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