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Asset Management Partners Discuss Zombie Investments and End of Life Fund Issues in Private Debt Investor

Practices: Asset Management, Private Funds, Credit Funds, Private Equity, Sponsor Representation, Investor Representation

An article published by Private Debt Investor on May 15 titled “The zombie investments have risen” examines what happens to investments at the end of a credit funds’ life and when customary fund-life extensions expire. Insights from asset management partners Jessica O’Mary and Morri Weinberg are featured throughout the article.

On issues surrounding loan maturation and termination of a fund, Ms. O’Mary notes that “there are a lot of credit funds that have other types of assets or residual interests that may not align with the end of the fund.”

If enough investors want to liquidate their positions, the firm can sell the remaining loans as a bulk asset. This is usually easier than selling off assets individually, said Mr. Weinberg.

Ms. O’Mary serves as the leader of Ropes & Gray’s credit funds practice and Mr. Weinberg is co-head of the firm’s private funds specialty group.

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