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How We Rate Alternative Investment Funds

Alternative investment funds (AIFs) are increasingly turning to credit markets through bond issuance, net asset value facilities, capital call facilities, and subscription lines. This primer explores how we apply our AIF methodology to various fund structures across private equity, public equity, venture capital, and private debt funds, alongside hedge funds and some investment companies that share key characteristics of AIFs. This primer has been updated to highlight how we rate subscription line facilities, incorporating our criteria (published Aug. 30, 2024) that primarily addresses the likelihood that committed limited partners provide called capital when requested to allow for repayment of a subscription line on time and in full. Additionally, this primer details how we calculate stressed leverage for different types of funds, how we capture the risks relating to the funding and liquidity of different fund structures, and how we rate instruments issued by AIFs.

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