Private Equity Fund Restructuring: Negotiating Terms, Avoiding Conflicts of Interest and Avoiding Regulatory Scrutiny

Private equity fund restructuring transaction volume was $1.2 billion in 2012 and $1.6 billion in 2013. At the end of 2014, restructuring transaction volume shot up to $6.4 billion, fueled partly because funds raised during the boom years have reached the end of their lifespan and some funds are struggling to deliver returns to investors.

These transactions, however, can be challenging to close as negotiations over restructuring terms are very contentious and these deals are likely to involve conflicts of interest. Restructuring these funds on the secondary market is another common vehicle for dealing with these older funds.

How funds should approach these end-of-fund-term situations is a hot topic for the industry, drawing attention from the SEC, which has plans to draw up guidelines to help private equity firms plan for orderly transition.

Listen as our authoritative panel of finance practitioners discusses developing market trends for private equity fund restructurings and best practices to negotiate restructuring terms, minimize conflicts of interest, and avoid regulatory scrutiny.

1. Fund restructuring trends
2. Sponsor fiduciary duties and conflicts of interest
3. Options for existing investors
4. New fund terms
   1. Distribution waterfalls
   2. Additional capital
   3. New investments
   4. Governance, reporting, voting
5. SEC regulatory scrutiny

The panel will review these and other key issues:

• What inherent conflicts of interest are present in fund restructuring transactions and what are best practices for minimizing conflicts?

• What are the legal and business considerations for both sponsors and existing investors in a fund restructuring scenario?

• What are key fund terms that must be negotiated in a restructuring deal?