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Seward & Kissel LLP Publishes First-Ever Closed-End Fund Study

via Business Wire

Seward & Kissel LLP, a leading financial services-focused law firm, announced the publication of its first-ever Closed-End Fund Study, highlighting key terms and trends among private equity, private credit and growth equity managers. The Study’s release coincides with the firm’s 75th anniversary of forming its first private fund, highlighting the evolution of the firm and the exceptional growth of the firm’s closed-end practice, especially over the last decade.

“This Study reflects the evolution of our private fund practice and industry presence,” said Kevin Neubauer, partner and co-head of the firm’s Investment Management Group. “We’ve witnessed firsthand the increasing demand for sophisticated fund structures and for tailored solutions to address LP needs, as highlighted in the Study.”

The Study includes more than 75 select funds that the firm has advised over the last two years, ranging from first-generation vintage through seventh generation vintages. Key findings of the Seward & Kissel Closed-End Fund Study include:

  • Private credit funds are a sizeable segment of the market. 31% of the funds studied pursue private credit strategies, reflecting Seward & Kissel’s robust private credit practice.
    • “Being smart and innovative are the two key traits of private credit managers that are differentiating their capabilities in an increasingly crowded field. These are exactly the traits that LPs want in their alternative allocations. We are also seeing market volatility benefit private credit strategies, particularly distressed strategies,” said Investment Management partner Kevin Cassidy, contributing author of the Study.
  • Hybrid structures are on the rise. 11% of the funds in the Study were hybrid, with nearly 90% being first-generation funds.
    • “There is a significant amount of variation across crossover, evergreen and hybrid funds, presenting an opportunity to better align LP and manager objectives through customization. The degree of flexibility can be enhanced even further by using a cell or series vehicle. The objective here is that the fund structure is amplifying the manager’s expertise and opportunity set, as opposed to limiting either,” Cassidy continued.
  • Capital trends vary significantly by fund vintage. First-generation funds on average targeted $450 million as their initial capital raise, with later-generation funds averaging $2 billion. The minimum capital commitment was highest for private credit strategies, at an average of $4.3 million.

Among many other honors in the private funds space, just this month, Seward & Kissel was ranked in PEI’s Fund Formation League Table as a top 20 fund formation law firm by aggregate value of capital raised by funds represented, and by total number of funds formed.

The Closed-End Fund Study provides valuable insights into the current market landscape and underscores Seward & Kissel’s continued leadership in the investment fund industry. To read the full Study, click here. Cassidy is available to speak with the media about the findings.

About Seward & Kissel LLP

Seward & Kissel LLP, founded in 1890, is a leading U.S. law firm with an international reputation for excellence. The firm is particularly well known for its private fund and investment management work, having advised its first private fund in 1949, and having earned numerous best in class awards over the years.

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