It was almost Valentine's Day. We were in Miami. Magic Johnson had given what amounted to a stand-up comedy routine and then we all went outside laughing on the veranda for cocktails. The weather was perfect. Hillary Clinton had spoken the day before; David Rubenstein had given arguably the best presentation in the history of the Fund Finance Association (the "FFA"). All of us were gushing optimism and our businesses were absolutely humming. On the veranda, I tried to convince Jeff Johnston that next year we should hire a great band - I suggested Darius Rucker - and have a charity concert to raise money for Project Sunshine as part of our FFA Cares initiative. Um. Did I mention there were cocktails? Perhaps COVID originated to temper my froth. As it turns out, we were lucky to even have had a conference at all. By February 24th, the pullback in the equities market had arrived with a jolt, and all our travel plans were cancelled. The markets vacillated wildly thru early March, with multiple limit up and limit down days whipsawing the NYSE. By March 20th, "WFH" had made Urban Dictionary and the FFA had postponed the European conference, which had been scheduled for June. And then the press assault on fund finance commenced. It started with articles suggesting private equity funds were accelerating capital calls, threatening already impaired limited partner liquidity. The denominator effect was going to cut off all fund formation. And then, on March 31st, the now infamous article in Private Funds CFO titled "LP defaults 'already happening.' Here's why, and what GPs' options are" hit our inboxes. As if our April was not going to be busy enough doing KYC on all the qualified borrowers being joined to subscription facilities, a tsunami of information requests crashed down from senior management and risk departments at the banks. Every banker's calendar became blanketed with senior management presentations on the perceived risks in their portfolios (such overblown risks having been both forecasted by young members of the press without actual transaction experience and their likely impact embellished as systemically catastrophic by Ludovic Phalippou). What happened next made me very proud to be a part of the FFA. Jeff Johnston called a board meeting. The agenda: how can we get accurate information out to the market to redirect the inflammatory and misleading narrative? The response? The FFA Board members converted into walking whirlwinds. Jeff recorded a podcast with me where he shared Wells Fargo information that, despite the massive economic dislocations, the bank had not yet seen a single exclusion event from an institutional investor in its vast portfolio. At Cadwalader, we shifted Chris van Heerden from legal work to market analysis, and each week Fund Finance Friday put out written updates and video clips confirming the credit resilience of the fund finance market. Nick Mitra led a major initiative, somewhat akin to squirrel herding, whereby he organized group calls of all of the FFA sponsors, almost all of whom attended and continually reported near-perfect funding performance by limited partners. On these calls, Mary Touchstone and Jocelyn Hirsch confirmed that their fund clients were operating effectively and that their investors were funding capital calls, even out of China. Blackstone, TPG and Goldman Sachs participated, all projecting calm and confidence. Then, on April 9th, the FFA, with extensive input from Jeff Maier, Terry Hatton and Tina Meigh, published a COVID-19 market update response addressing the negative press and setting straight the actual facts, as reported by the FFA sponsors on the update calls. That piece became widely circulated throughout the market, and has even been referenced in quarterly bank earnings announcement calls. By April 15th, The Drawdown ran a headline: "Nothing to see here: LP defaults are fake news." Narrative corrected. Mission accomplished. The market steadied. Truly great and impactful (and unpaid) industry leadership by Jeff and Nick during a time of real crisis. On behalf of the fund finance industry, thank you gentlemen. However, steady did not mean calm. While the leveraged finance and real estate markets hibernated in the second quarter, fund finance transaction volume exploded (Tiger King had ended so people were able to return to business, I guess). April and May were incredibly busy; deal volume and portfolio maintenance at record levels. Prospective NAV financing calls dominated the days, as sponsors wanted to get liquidity into stressed portfolio companies. And the subscription finance market was full out. We all assumed that the increased flow was largely demand pulled forward; that is, deals that in the normal course would have closed later in the year were being accelerated into early closings while financing remained available. That seemed validated to some extent in August and early September, as deal volumes moderated a good bit to a more familiar pace. But it was not the whole story. During the summer, a giant injection of fiscal stimulus had reached the pockets of both individuals and (mostly) small businesses in the United States. Many local governments eased stay-at-home mandates and the consumer started buying things beyond toilet paper. And for those of us that thought Ben Bernanke had pushed the limits of aggressive monetary policy, Jerome Powell said: "Hold my beer." The Fed ensured savers would earn no yield in fixed income for the foreseeable future and injected an elephant's worth of liquidity into the market (just commentating here, not criticizing: most global markets reacted with a standing ovation). Fund finance was no different. The summer's policy maneuvers buoyed the equity markets and in turn investor and banker confidence, thus drawing back into the market many of the banks that had sat on the sidelines for the crisis' early innings. And then came the autumn. With the benefit of hindsight, the stars seemed to have aligned in a way that should have completely constricted our pipeline. COVID infections spiked, and then spiked again month after month. Quarantine orders were reinstated, including in large metro areas like London. Fund formation had leveled off materially, with Preqin reporting a first half decline of 26% year-over-year, reducing opportunities. Social justice issues took center stage, rightly taking our attention from business as usual to more immediately pressing societal needs. And as if needing to pile on, the U.S. Presidential election and Brexit negotiations developed quite an unfortunate animosity and attempted to monopolize mindshare. The FFA had to cancel its European and Asia conferences, switching instead to a virtual program. And yet fund finance deal flow, ever the salmon immune to the upstream, accelerated mightily again. In November, Cadwalader opened more fund finance matters in a single month than we ever have before. Many of the lenders active in the market grew loan outstandings extensively during the fall; well into double digits. Even some of the banks that paused originations in the second quarter put on so much volume in the fourth quarter that they were well on pace to materially outperform their 2019 results. As I write this in early December, I would estimate something close to $100 billion of new fund finance commitments will be originated by the end of 2020, an amount far greater than corresponding runoff. 2020 was an amazing roller coaster of a year for fund finance. The credit wherewithal of the products, not only in subscription finance but also in virtually all of the NAV lending spheres, was battle-tested and proven fit for service. And while we were certainly blessed and incredibly fortunate, the pristine credit performance in such unprecedented economic dislocation is a testament to the great liquidity management of the funds and their investors as well as the prudent transactions structured by the lenders and their counsel, many of whom are the authors of this book. I doubt many fund finance bankers or lawyers have been recognized, praised or rewarded for the outstanding work they did structuring transactions that thrived through this difficult environment. But they should be. I know the year this book's contributors have had; I lived it with them. They were worried their parents were going to get sick. They were worried about their personal finances. They were worried pensions would walk away from capital commitments, undermining our entire industry's underpinnings. The urgency of the matters they were called on for counsel was more intense than anything in our recent past; probably more intense than ever. Our firms all enacted hiring freezes. So, while our transaction volumes and client needs accelerated, hiring was prohibited from keeping pace. The exhaustion just had to be carried; the lawyers just had to make due. And in most cases, make due from their own kitchen table while trying to help a crying nine-year-old log onto an iPad for remote learning since school had gone virtual. And yet, they have shown up for the "Pink Book" again. With that backdrop, we are pleased to present the fifth(!) edition of the Pink Book, which is actually called Global Legal Insights - Fund Finance for those that are new to the market. Cadwalader, Wickersham & Taft LLP is pleased to serve as the contributing editor. As with its predecessors, this book commences with 23 product- and market-oriented chapters. These chapters in many cases delve into new areas and at greater depth than in prior editions. Then, 16 jurisdiction-specific updates follow. Our hope is that we have provided the reader a comprehensive global update that is valuable for your daily practice. Despite all the challenges the contributors faced in 2020, notice the optimism in their pieces. Notice the absence of complaining. Notice the way ESG is woven thru the fabric of this entire book - the fund finance community is committed to being part of the solution. The global fund finance bar is an incredibly committed and generous lot; I am quite proud to be a part of it. On behalf of the entire Board of the FFA, our sincere thanks and applause to the contributors. Nobody would have blamed you had you said this was not the year. We are grateful for your time, support, quality submissions to this book and contributions to our great industry. My further thanks to the terrific team at Global Legal Group Ltd. You have been a committed partner to the FFA and the fund finance industry. Despite every challenge 2020 could generate, you never wavered on the delivery of this fifth edition.

Table of Contents:
Introduction Michael C. Mascia, Cadwalader, Wickersham & Taft LLP General chapters Hybrid and asset-backed fund finance facilities Leon Stephenson, Reed Smith LLP 1 Subscription line lending: Due diligence by the numbers Bryan G. Petkanics, Anthony Pirraglia & John J. Oberdorf III, Loeb & Loeb LLP 15 Derivatives at fund level Vanessa Kalijnikoff Battaglia, Peter Hughes & Joseph Wren, Travers Smith LLP 26 Ka-Pow! Ka-Zoom! Subscription lines - the 2020 superheroes Jan Sysel, Jons Lehmann & Kathryn Cecil, Fried, Frank, Harris, Shriver & Jacobson LLP 38 Liquidity alternatives for private funds in a COVID-19 world: A U.S. perspective Michael Wolitzer, Peter Gilman & Jennifer Levitt, Simpson Thacher & Bartlett LLP 48 Investor views of fund subscription lines Patricia Lynch & Patricia Teixeira, Ropes & Gray LLP 59 Enforcement: Analysis of lender remedies under U.S. law in subscription-secured credit facilities Ellen G. McGinnis & Richard D. Anigian, Haynes and Boone, LLP 68 Valuation adjustment rights in NAV Facilities Meyer C. Dworkin & James H. Jiang, Davis Polk & Wardwell LLP 89 Fund finance solutions: A manager's considerations Samantha Hutchinson, Cadwalader, Wickersham & Taft LLP Emily Rose, Silicon Valley Bank 95 Comparing the European, U.S. and Asian fund finance markets Emma Russell & Emily Fuller, Haynes and Boone, LLP Ben Griffiths, MUFG Investor Services 100 Umbrella facilities: Pros and cons for a sponsor Richard Fletcher & Sophie Treanor, Macfarlanes LLP 111 Side letters: Pitfalls and perils for a financing Thomas Smith, Margaret O'Neill & John W. Rife III, Debevoise & Plimpton LLP 120 Fund finance lending: A practical checklist James Heinicke, David Nelson & Daniel Richards, Ogier 130 Assessing lender risk in fund finance markets Robin Smith, Alistair Russell & Emma German, Carey Olsen 141 Fund finance meets securitisation Nicola Wherity & Jessica Littlewood, Clifford Chance LLP 153 The Cayman Islands Private Funds Law and its impact on fund finance Derek Stenson & Michael O'Connor, Conyers 161 Fund finance in Ireland and Luxembourg: A comparative analysis Jad Nader, Ogier, Luxembourg Phil Cody, Arthur Cox LLP, Ireland 167 The fund finance market in Asia James Webb, Carey Olsen Daniel Lindsey, Goodwin Emma Wang, East West Bank 178 Fund finance facilities: A cradle to grave timeline Bronwen Jones, Winston Penhall & Kevin-Paul Deveau, Reed Smith LLP 188 COVID-19 and other developments: Proof of concept for newer liquidity solutions for alternative asset fund managers? Jamie Parish, Danny Peel & Katie McMenamin, Travers Smith LLP 198 The rise of ESG and green fund finance Briony Holcombe, Robert Andrews & Lorraine Johnston, Ashurst LLP 206 Funding Cayman Islands multi-funds - Diverse liquidity options and considerations Agnes Molnar & Richard Mansi, Travers Thorp Alberga 212 A decade of global fund finance transactions Michael Mbayi, Wildgen S.A. 220 Country chapters Australia Tom Highnam & Rita Pang, Allens 227 Canada Michael Henriques, Alexandra North & Kenneth D. Kraft Dentons Canada LLP 240 Cayman Islands Simon Raftopoulos & Anna-Lise Wisdom, Appleby 247 England & Wales Samantha Hutchinson, Jeremy Cross & Nathan Parker, Cadwalader, Wickersham & Taft LLP 257 France Philippe Max, Guillaume Panuel & Meryll Aloro, Dentons Europe, AARPI 266 Guernsey Jeremy Berchem & Nicole Sorbie, Appleby 273 Hong Kong Fiona Cumming, Patrick Wong & Charlotte Robins, Allen & Overy 281 Ireland Kevin Lynch, Ian Dillon & David O'Shea, Arthur Cox LLP 291 Italy Alessandro Fosco Fagotto, Edoardo Galeotti & Valerio Lemma, Dentons Europe Studio Legale Tributario 307 Jersey James Gaudin & Paul Worsnop, Appleby 315 Luxembourg Vassiliyan Zanev, Marc Meyers & Antoine Fortier Grethen, Loyens & Loeff Luxembourg S.a r.l. 320 Mauritius Malcolm Moller, Appleby 331 Netherlands Gianluca Kreuze, Michael Maters & Ruben den Hollander, Loyens & Loeff N.V. 342 Singapore Jean Woo, Danny Tan & Cara Stevens, Ashurst ADTLaw 349 Spain Jabier Badiola Bergara & Luis Maiz, Dentons Europe Abogados, S.L. (Sociedad Unipersonal) 356 USA Jan Sysel, Ariel Zell & Flora Go, Fried, Frank, Harris, Shriver & Jacobson LLP 367