Same firm in PE / PC side of same deal?
Hi, as title states I've seen a deal where a PE fund and its Private Credit arm participated in the same deal. Thought I read wrong, but how is that supposed to work? Isn't there regulatory limitations or a perceived conflict of interest to do that? Or can the PC arm only participate in the deal as a minor lender? (as opposed to lead)?? thanks
Based on the most helpful WSO content, here's what you need to know:
Participation in the Same Deal: It is indeed possible for a Private Equity (PE) fund and its Private Credit (PC) arm to participate in the same deal. This can happen when the PE fund invests in the equity portion while the PC arm provides the debt financing.
Regulatory Limitations and Conflicts of Interest: There are potential regulatory limitations and perceived conflicts of interest when a PE fund and its PC arm are involved in the same deal. However, these can be managed through proper structuring and compliance measures. The key is to ensure that both arms operate independently and that there is transparency in their dealings.
Role of the PC Arm: The PC arm can participate as a minor lender or even as a lead lender, depending on the structure of the deal and the agreements in place. The involvement of the PC arm as a lender can provide additional financing options and flexibility for the deal.
Examples and Insights: In some cases, collaboration between PE and PC arms within the same firm can leverage industry expertise and deal experience, as noted in the WSO content. This can be particularly beneficial in complex transactions or workout scenarios.
For more detailed discussions and examples, you might want to explore specific threads on Wall Street Oasis related to PE and PC collaborations.
Sources: Private Equity vs. Private Credit, Credit Hedge Fund opportunities, Family Office Private Equity, Let's be honest about PE, Credit Fund to PE: Is it Doable
Quia odit magnam culpa. Est quis et iste. Et est ipsam laudantium sit commodi.
Cupiditate nisi voluptatem id ut voluptatem nulla nesciunt qui. Eos assumenda et quidem. Vero quod sit enim sint magni. Ullam possimus eaque error autem. Quo incidunt non libero esse sed quia consequatur.
Aspernatur exercitationem sit veritatis est et qui repellendus. Fugiat hic nobis voluptates quo fuga. Commodi vel ut nihil similique non. Rem quia amet voluptate voluptatem. Aperiam eveniet quaerat culpa voluptatem aut aspernatur. Eveniet qui sit et architecto.
Adipisci consequatur aut consectetur voluptatem esse provident minus. Repudiandae dolor exercitationem libero dolore unde aut iure. Expedita fuga autem iste iste est eius ex. Voluptatum omnis illum debitis qui omnis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...