(This video was initially released as part of the Alternative Credit Council (ACC) Global Virtual Summit 2021, held on 20 and 21 April 2021)

Corporate financing in Europe has been undergoing a significant transformation over the past few years. With increased regulatory and capital requirements putting pressure on banks’ balance sheets, alternative lenders have emerged with sophisticated and flexible solutions aimed at attracting borrowers. As a result, private credit has grown significantly in terms of the number and size of deals.

At Arendt, we have been involved in the growth of the debt fund industry since its inception. We recognise that debt funds operate differently from standard private equity funds, and the size of our firm has allowed us to create a special team dedicated to the structuring and operation of these funds.

Along with fund formation specialists and regulatory lawyers, we work closely with our tax and finance teams to advise on all aspects of underlying investments.

Through our understanding of the particular characteristics of debt funds, we provide expert advice regarding:

  • Market practice legal terms, performance-linked fees, duration of the investment period, re-investment and bespoke financial covenants.
  • Fund financing arrangements to facilitate investment when funds are not yet available, the smooth implementation of follow-on investments, bringing of currency mismatches, and provision of liquidity to cover pending management fees.
  • VAT-efficient fee structuring.
  • Impact of the evolving BEPS corporate taxation standards.
  • Transfer pricing rules.

As an independent law firm, we have close contact with leading specialists in the jurisdictions where borrowers are located, critical to delivering a comprehensive and efficient service to our clients.

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