Davis Polk partner and Investment Management head Leor Landa was quoted in Private Equity Law Report on contingent dislocation funds and their unique features. One feature is the dormancy period in which funds remain inactive until a dislocation event occurs. Leor noted that there is a broad spectrum of dormancy periods, with most lasting approximately two or three years. Leor also pointed out that some CDFs are activated in manager’s sole discretion. “If you trust your sponsor – which you must if you’re willing to give it a contingent commitment – then why would you stand in its way?” he said.

“Contingent Dislocation Funds and Market Disruptions: Unique Mechanisms That Position Them to Pounce (Part Two of Three),” Private Equity Law Report (March 22, 2022) (subscription required)

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