Is anyone else having liquidity issues with this? I work at a good MM fund and co-invest is a good part of the compensation package for juniors - we chose a # at the start of the year and have to co-invest the same amount to every platform deal that we the fund does regardless if we worked on it. It's good money if you extrapolate past returns, but we've been pretty active and I don't come from a wealthy background so the cash comp hasn't been keeping up with the capital calls to the point that it has become an issue. I don't want partners to think that I'm 'irresponsible with my finances' but I just don't have the option to ask friends / family to cover like others do so I'm alone and pretty strapped.
I know megafunds have access to personal credit lines from banks but are there any options for good MM funds? It's crazy that I have all these assets (the private shares I co-invested into) but no one will give me a credit line for them. Like if they were public securities I could get a margin loan but just cause they are private I can't get a loan? I'm scrambling right now and wondering if there any options I'm missing.
Check out Silicon Valley Bank. Not certain, but they have a bunch of interesting solutions for people with significant illiquid assets that need liquidity
Thanks - I checked with SVB, First Republic, Signature Bank and JPM (who I've been banking with for ~10 years) but they won't help me. They'd consider it a personal loan and none of them are looking at the securities I purchased as collateral.
Will the fund lend you the cash at a low APR? Softbank did something similar (albeit forced, not voluntary).
Delete
Lol so you denigrate the guy for asking questions, trash his partners, say Mitt Romney has no EQ, and then when people disagree with you, you delete? big man haha
What if you go vanilla personal loan from Chase or Wells? You will probably pay a high single digit rate but at least you can cover payments with your salary and the cost of capital is lower than your PE returns.
Not a good idea but not a terrible idea either, depends on the amount of risk you really want to take. The best option here is really just to talk to the partners and tap into their connections.
Bridge Bank/Western Alliance could be worth a look
My fund let us borrow against our cash bonus for co-invest. Is that an option?
We had a program with FRB (First Republic Bank) - don't know what the rates are now, but they've been hungry for business and have heard they've given out personal lines of credit at pretty decent rates (I didn't end up using them....so not really a promotion...)
Seconded - FRB is the answer here, they have a whole suite of products tailored specifically for these situations.
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