Davis Polk partner David Kennedy was quoted in Private Equity Law Report from PLI’s “Fund Finance 2025” program on secondaries fund financing transactions.

Noting the importance of diligence for underlying limited partnership agreements (LPAs), David said, “Many lenders rely on the secondaries fund sponsor’s review of the underlying LPAs. Typically, the secondaries fund manager represents that the pledge of the collateral – and any foreclosure on that collateral – will not violate the underlying LPAs.”

“[Confidentiality is] very, very important to the underlying funds,” David stated.

The article noted that a secondaries fund manager must ensure the special purpose vehicle (SPV) has the right to share information with underlying funds of its lender. “Due to time constraints, some lenders will only require waivers of confidentiality from the SPV’s major or anchor holdings and accept a periodic certification or capital account statement for other LP interests,” he said.

Discussing borrower’s reporting covenants, he said, “Lenders can achieve their monitoring goals with periodic certifications as to the SPV’s holdings and their values.”

“Key Considerations in Secondaries Fund Financing Transactions,” Private Equity Law Report (January 8, 2026) (subscription required)

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