A COMPLETE GUIDE TO SUBSCRIPTION LINES

A subscription line is one of the most widely used fund-level financing tools in private capital. It gives funds access to short-term credit secured against LP commitments, helping managers move quickly on investments without the delay of calling capital every time. In this guide, we cover what a subscription line is, how it works, when funds use it, and what lenders look for.

What is a subscription line?

A subscription line, also called a capital call facility or capital call line, is a short-term credit facility secured against the uncalled capital commitments of a fund’s limited partners. Rather than calling capital from LPs every time an investment is made, a fund draws on the subscription line to fund the transaction and then calls capital from LPs to repay it, typically within 30 to 180 days.

The facility is sized based on the quality and quantum of the LP commitments supporting it. Lenders will look at who the LPs are, their history of meeting capital calls, and the terms of the LP agreements before agreeing a facility limit.

Subscription lines are most commonly used by private equity, real estate, and private credit funds in their early to mid-life, while there is still significant uncalled capital available to support the facility.

What is a capital call facility?

A capital call facility is another name for a subscription line. The two terms are used interchangeably across the market, though “capital call facility” tends to be more common in the US while “subscription line” is the more widely used term in the UK. Both refer to the same product: a revolving credit facility secured against LP commitments, used to bridge the timing between making investments and calling capital.

How does a subscription line work?

A subscription line works by giving a fund access to a pre-agreed revolving credit facility, sized as a percentage of the fund’s aggregate uncalled LP commitments. When the fund wants to make an investment, it draws on the facility rather than immediately calling capital from LPs. The draw is then repaid once the capital call is made and funds are received from LPs.

Key structural features include:

• Facility limit: typically sized as a percentage of uncalled LP commitments, reflecting the quality and diversity of the LP base.
• Repayment period: draws are usually repaid within 30 to 180 days, once LP capital has been called and received.
• Revolving structure: once repaid, the facility can be drawn again, giving the fund ongoing flexibility to deploy capital quickly throughout its investment period.
• Security: the lender takes security over the LP commitments and the fund’s right to call capital, rather than over the underlying portfolio investments.

Fund managers typically use subscription lines for one or more of the following reasons:

• Bridging capital calls: funding an investment immediately and repaying the facility once LP capital is called, avoiding the delay and administrative burden of calling capital for every transaction.
• Improving IRR: by delaying LP capital calls, subscription lines can improve the fund’s internal rate of return, though this should be used thoughtfully and in line with LP expectations.
• Execution speed: moving quickly on a time-sensitive deal without waiting for capital to be committed and transferred.
• Operational efficiency: consolidating multiple small capital calls into fewer, larger calls reduces the administrative burden on both the fund and its LPs.

When assessing a subscription line, lenders focus primarily on the quality of the LP base. Key considerations include:

• LP quality and diversity: institutional LPs, including pension funds, sovereign wealth funds, endowments, and family offices, are viewed most favourably. A concentrated LP base or reliance on high-net-worth individuals introduces more risk.
• Commitment terms: lenders will review LP agreements carefully to understand the enforceability of capital commitments and any carve-outs or limitations.
• Fund manager track record: a demonstrable history of managing funds, calling capital, and meeting obligations to LPs is an important factor.
• Uncalled commitment quantum: the facility will be sized as a percentage of aggregate uncalled LP commitments, so the amount still available to call directly affects the facility limit.

OakNorth provides subscription lines, also known as capital call facilities, for lower mid-market funds. We work with funds typically ranging from £50m to £1bn in AUM, with facility sizes from £5m to £75m.

We work across private equity, real estate, and private credit fund types, and we take the time to understand each fund’s specific structure, LP base, and investment strategy before recommending a solution. Our team brings genuine sector expertise across fund types, which means we understand the dynamics of your fund, not just the mechanics of the facility.

We operate through an interactive credit committee process, which means fund managers engage directly with our decision-makers rather than waiting for a black-box answer. This transparency means fewer surprises and faster decisions. We typically complete facilities in 2-4 weeks rather than 3-6 months.

And unlike traditional banks, we don’t require you to move your banking relationship or open ancillary accounts. Our facilities are standalone: you get the capital you need, without the strings attached.

If you’re a fund manager exploring subscription line options, get in touch with our fund finance team.

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Alongside subscription lines, OakNorth provides a full range of fund finance solutions including NAV facilities, GP facilities, and liquidity lines. Find out more on our fund finance page.

What is a subscription line in fund finance?

A subscription line is a short-term revolving credit facility secured against the uncalled capital commitments of a fund’s limited partners. It allows a fund to make investments immediately and call LP capital afterwards to repay the facility, typically within 30 to 180 days.

Is a subscription line the same as a capital call facility?

Yes. The two terms refer to the same product. “Capital call facility” is more commonly used in the US, while “subscription line” is the more widely used term in the UK.

What is the difference between a subscription line and a NAV facility?

A subscription line is secured against uncalled LP commitments and is used early in a fund’s life, while a NAV facility is secured against the fund’s existing portfolio and is typically used later, once capital has been deployed. Find out more on our NAV finance page.

How long does a subscription line last?

Subscription lines are typically put in place for the duration of a fund’s investment period, with individual draws repaid within 30 to 180 days of being made. The facility itself can be renewed or extended depending on the fund’s needs.

How quickly can OakNorth put a subscription line in place?

We typically complete subscription lines in 2-4 weeks from initial discussion to drawdown, depending on the complexity of the fund structure and availability of LP documentation.

Does OakNorth provide subscription lines for smaller or first-time funds?

Yes. We specifically focus on the lower mid-market, working with funds with AUM of £50m–£1bn, including first and second time managers who are often underserved by larger institutions. We take the time to understand the LP base and fund structure regardless of size or track record length.