And That’s How Sally “Cs” It: Thoughts on Fund Terms and Governance Provisions
If you watch Glee, you understand the title to this article. If you aren’t a Glee fan, the show features a middle-aged, tall, smart-talking, cynical blond named Sue Sylvester who offers up her opinions in a segment of the show titled, “And That’s How Sue ‘Cs’ It.” My kids have noted, let’s just say, more than a few similarities between Sue and their mother.
This article is my view of certain fund terms and governance provisions for closed-end funds, and it is based on my participation in the sector since 1993. The past few years have been particularly instructive, as the effectiveness (or not) of fund terms in times of extreme stress has been tested. The following is not an exhaustive guide as I’ve left out areas that have been well covered, such as investment management fees.
GENERAL PARTNER/SPONSOR CO-INVESTMENT The source of the co-investment matters a lot. Co-investment from the parent company of a general partner is not an ef