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Energy and Infrastructure Fund Sponsors Have Options in Seeking Liquidity for Portfolio Companies and Investments Amid Market Dislocation

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In the wake of the dramatic drop in oil prices resulting from the ongoing COVID-19 crisis and the Russia-Saudi oil price war, many energy fund sponsors are confronting urgent and substantial liquidity needs for their portfolio companies and investments. In many of these cases, traditional asset-level financing may be costly and/or unavailable, in part due to the increased credit risk in the energy sector. We have seen a number of fund sponsors consider potential alternatives to traditional asset-level financing that are available to address these financing needs and that might be a solution for funds of all types in the broader energy and infrastructure space. These include (1) raising an “annex fund”, (2) amending existing fund documents to increase available capital, (3) obtaining a NAV facility, (4) cross-fund transactions and (5) GP-led secondaries.

Read the full article from Kirkland & Ellis here: https://www.kirkland.com/publications/blog-post/2020/03/energy-fund-sponsors-seeking-liquidity

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