The Private Funds CFO newsletter, a publication of Private Equity International, this week touched on fund borrowing in the context of performance reporting. The short write-up follows a discussion at PEI’s recent CFOs and COOs Forum at which audience members anecdotally reported some lengthening in facility terms.

While ILPA recommends reporting fund performance on both a gross and ex-facility basis, the article points out that this approach is less straightforward than it sounds. For one, pro forma ex-facility reporting would overlook real advantages of a credit line, including the speed to deployment and not calling LP capital for unconsummated investments. As a related point, the ex-facility reporting may be too theoretical to be meaingful. The article is available here. (As an aside, we just can’t quite get on board with “levered/unlevered” IRR nomenclature—subscription facilities do not increase fund buying power.)