Adams Street Partners - Fri, 05/24/2024 - 19:12

The Advantages of Being a Lead Lender: Bill Sacher Q&A

Key Takeaways

  • The designation of lead lender often confers significant advantages for a private credit manager, including privileged access to data and influence over capital structure, covenants and loan terms
  • Private equity deal sponsors in a middle market company auction bring in lead lenders at the outset of the underwriting process, typically two to three months before a transaction closes, while club participants have only a few weeks to conduct their deal diligence
  • Lead lenders typically have greater access to the raw data that the company provides as part of the sale process; enjoy more management interactions; and have early access to third-party consultant work that pressure tests key metrics including quality of earnings, market analysis, and other potential risks
  • Underwriting advantages derived from lead lender status can drive superior risk-adjusted returns and mitigate potential losses, while the extra work undertaken by lead lenders can result in incremental fees

Download Article

This information is not investment advice or an offer or sale of any security or investment product or investment advice. Offerings are made only pursuant to a private offering memorandum containing important information. Statements are made as of the date of this release, and there is no implication that the information contained herein is correct as of any time subsequent to such date. References herein to specific sectors, strategies, or investments are not to be considered a recommendation or solicitation for any such sector, strategy, or investment. Past performance is not a guarantee of future results. Projections or forward-looking statements contained in the Paper are only estimates and there can be no assurance that the results set forth in the projections or the events predicted will be attained, and actual results may be significantly different from the projections. Also, general economic factors, which are not predictable, can have a material impact on the reliability of projections or forward-looking statements.  Adams Street Partners, LLC is a US investment adviser governed by applicable US laws, which differ from laws in other jurisdictions.


Sign Up Now for Full Access to Articles and Podcasts!

Unlock full access to our vast content library by registering as an institutional investor .

Create an account

Already have an account ? Sign in