Fortress rescues listed FoF with $200m loan

Campbell Lutyens has brokered a secondary restructuring transaction of Swiss-listed APEN, formerly known as AIG Private Equity.

APEN, the Swiss-listed fund of funds, has restructured its balance sheet and received a $200 million credit facility from Fortress Investment Group as well as a $25 million loan from an unnamed Swiss bank.

The $25 million loan, a revolving credit facility due in one year, has been drawn down, as has $100 million of the Fortress loan. Fortress’ loan matures in 2016. APEN, formerly known as AIG Private Equity, has used the funds to pay down $79 million in debt and will use the remainder to fund future capital calls.

The lenders, in return, receive preferred distributions and share in an equity participation of 10 percent to 25 percent, depending on how much of the facility is drawn down.

Described as a “secondary restructuring” by lead advisor Campbell Lutyens, the transaction was part of an ongoing restructuring process for the listed fund. The vehicle had been struggling with liquidity issues stemming from a combination of over-commitment and leverage in the fund, which breached debt covenants in September.

It has been actively selling stakes on the secondary market, in the past nine months reducing its level of undrawn commitments to $350 million from $670 million, according to a statement.

The fund has also terminated its investment management agreement with AIG Private Equity Management.

APEN said it does not plan to make any new investments, save for those associated with ongoing portfolio management.

The fund’s refinancing and restructuring was advised by Campbell Lutyens along with Pinkerton Capital Management, SJ Berwin, Schellenberg Wittmer, Goodwin Procter and Conyers Dill & Pearman.

This is the second complex secondary restructuring Campbell Lutyens has led in the latter part of this year, having earlier brokered the sale of a portfolio of venture assets from 3i to DFJ Esprit affiliate Encore Ventures. The transaction had financial backing from Coller Capital and HarbourVest Partners.