Funds Talk: February 2021

Topics covered in this issue include:

• Sale of Portfolio Companies Between Affiliated Funds: The (Legal) Road Less Traveled
  From time to time, private equity sponsors will exit a portfolio company investment by selling the portfolio company to buyers led by another fund managed by the same sponsor. Because the sponsor is essentially on both sides of the transaction, the sponsor must carefully consider and fairly address the customary business and legal issues arising in a typical private mergers and acquisitions (M&A) transaction. This note suggests a streamlined legal process that offers efficiencies of cost and timing, while still ensuring fairness to the investors in both the seller and buyer funds
  
  

• SEC Provides Disclosure Guidance on SPAC IPO and Subsequent Business Combination Transactions
  On Dec. 22, 2020, the Staff of the Division of Corporation Finance issued CF Disclosure Guidance: Topic 11 – Special Purpose Acquisition Companies to provide its views about certain disclosure considerations for special purpose acquisition companies (SPACs) in connection with their initial public offerings (IPOs) and subsequent business combination transactions.
  
  

• NAIC Working Group Extends Guidance on Restructuring Troubled Debt
  Insurers with portfolio assets that are distressed because of the COVID-19 pandemic will want to consider the extension of prior guidance from the National Association of Insurance Commissioners (NAIC) on restructuring such debt.