Preferred Equity Primer – Expanding the Financing Toolkit (Global Legal Insights)

In their recent Global Legal Insights article, Goodwin partners Ed Saunders, Robert C. Emerson, and Ravi Chopra explore the role of preferred equity in a constantly evolving fund finance world.

The article details the nature of preferred equity, compares it to debt terms, and explains why the product is so valuable in the fund finance tool kit. It examines structures, key terms, and necessary confirmations for successful preferred equity financing, including the importance of tax, legal, portfolio company diligence, and accounting considerations.

The authors also discuss the strategic uses of preferred equity for sponsors, such as optimizing the capital structure, enhancing returns, and facilitating liquidity without the constraints of traditional debt. They underscore preferred equity’s growing appeal as a flexible, efficient financing tool that complements or serves as an alternative to net asset value financing, reflecting its potential to address the diverse liquidity needs of funds and their sponsors effectively.

Read the full analysis: “Preferred Equity Primer – Expanding the Financing Toolkit” (Global Legal Insights)