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  • August 2019
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  • HBS Case Collection

Subscription Lines Dilemma

By: Victoria Ivashina and Terrence Shu
  • Format:Print
  • | Language:English
  • | Pages:5
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Abstract

This case follows a fictional managing partner of a private equity firm, as she contemplates whether to utilize subscription lines of credit in her firm’s funds. Subscription lines are revolving lines of credit secured by commitments from a fund’s investors. Private equity firms are increasingly using these lines to boost metrics and profits on their funds, but the benefits to investors are debatable. Because of this, the firm in the case had previously avoided using such lines. However, faced with the growing popularity of the practice in the industry and an increasingly competitive return environment, it is forced to reevaluate this position.

Keywords

Private Equity; Credit; Strategy

Citation

Ivashina, Victoria, and Terrence Shu. "Subscription Lines Dilemma." Harvard Business School Case 220-025, August 2019.
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About The Author

Victoria Ivashina

Finance
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More from the Authors
  • Weak Corporate Insolvency Rules: The Missing Driver of Zombie Lending By: Bo Becker and Victoria Ivashina
  • High-Yield Debt Covenants and Their Real Effects By: Falk Bräuning, Victoria Ivashina and Ali Ozdagli
  • Loan Types and the Bank Lending Channel By: Victoria Ivashina, Luc Laeven and Enrique Moral-Benito
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