Fund Finance
Definition
Included Investor
An LP rated at or above a specified creditworthiness threshold whose uncalled commitment counts towards the subscription borrowing base at standard advance rates (85–90% for large facilities). Exclusion triggers: sovereign immunity without waiver, side letter set-off rights, failure to fund, downgrade.
Deep Dives
Related Terms
Subscription Credit Facility
Revolving credit facility secured by a fund's rights to call uncalled LP capital commitments. Also called 'capital call line' or 'sub line'; collateral is LP promises to pay, not assets.
Designated Investor
An LP below the Included Investor threshold (unrated, lower-rated, family office) included in the borrowing base at lower advance rates (50–75%). Inclusion typically requires all-lender consent.
Coverage Ratio Approach
European fund finance methodology: no per-investor advance rates; instead, eligible LP commitments must cover total fund debt at a minimum 1:1 ratio. Administratively simpler than the US Borrowing Base Approach.