We assist financial sponsors, including private equity funds, hedge funds, and credit funds, through a range of affiliate transactions. As regulators and investors increase scrutiny of private investment funds, sponsors must be aware of actual or perceived conflicts of interest in affiliate transactions. Transactions or trades conducted by a sponsor among its affiliates may lead to investor
challenges and regulatory actions.
Fund affiliate transactions often address end-of-life fund issues or involve combinations of assets across funds. Affiliate transactions that may be actual, or may be perceived as, conflicts of interest include:
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Cross-Trades or Fund Transfers
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Fund Seeding
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Fund Recapitalization
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Principal Transactions
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Contractual Arrangements
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Season and Sell
We can assist sponsors in satisfying their legal, regulatory, and contractual duties in connection with an affiliate transaction. Fairness opinions or valuation opinions may serve to both protect the sponsor and facilitate
discussions about the transaction with the LP Advisory Committee and other parties. The receipt of independent advice and a financial opinion by a sponsor in affiliate transactions has become a widely adopted practice.
Houlihan Lokey has been at the forefront of providing valuation and fairness opinions to sponsors across a wide range of affiliate transactions. We have provided these “fund opinions” to many leading sponsors in connection with fund transfers, fund recapitalizations,
and other portfolio company transactions.
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