The growth of the asset management industry has resulted in a significant increase in the number of fund structures, including open-end funds, closed-end funds, private equity funds, funds of funds and hedge funds.  Fund sponsors and managers are constantly seeking credit from financial institutions such as banks and broker-dealers to help meet liquidity needs, or to provide leverage (gearing) for investments.  Funds may need additional liquidity to, among other things, clear and settle trades, make redemptions (daily, in the case of open-end funds, or periodically, in the case of closed-end or other funds), provide commercial paper back-up or, in the case of private equity funds, bridge capital calls.  Having credit available for liquidity will generally allow a fund to remain more fully invested than it otherwise might.  Funds may choose to leverage themselves (employ gearing) to boost returns, redeem auction rate or other preferred securities, retire other debt or fund self-tenders.

Bryan Cave has experienced dramatic growth in its involvement in these credit transactions on behalf of financial institutions and various funds and fund complexes.  Proper fund finance legal representation requires an understanding of the needs and limitations of these funds and the banks, broker dealers and others who supply credit to them, as well as knowledge and experience with the intricacies of credit documentation and, in the case of U.S. funds, the Investment Company Act, the Investment Advisers Act, margin regulations, Articles 8 and 9 of the Uniform Commercial Code, and the Internal Revenue Code, and in other jurisdictions, UCITS regulation, SICAV regulation, other various regulatory schemes and offshore financing issues.

For the 12 month period ended December 31, 2009, we closed 14 credit
transactions for these funds totaling in excess of the equivalent of US$1.9 billion,
and for the 24 months then ended, we closed 29 such transactions totaling in excess of US$3.9 billion.

Bryan Cave's Fund Finance Team brings together lawyers with an in-depth understanding of each of these areas to best meet the needs of our clients, whether they are:

• Financial institutions or others providing credit to funds in the form of uncommitted lines of credit, committed revolving credit facilities, term loans, master repurchase agreements or other structures; or
• Funds seeking credit.

The Fund Finance Team meets the needs of the firm's clients by:

• Concentrating the required legal knowledge and experience within a single working group, which allows it to operate more efficiently and effectively;
• Utilizing our in-depth knowledge of the ever-evolving “market” for credit terms; and
• Maintaining a library of forms of credit documentation that enhances speed of delivery and cost effectiveness on behalf of our lending clients.