Private Equity Cash Crunch Spawns Even More Newfangled Financing

Private equity firms keep ginning up ways to get cash into the hands of investors as a deal drought extends into its third year.

They’ve taken out loans against their portfolio companies. They’ve moved those they couldn’t or didn’t want to sell into so-called continuation vehicles, an asset-shuffling technique that allows them to hold investments for longer. They’ve even rolled over some of those assets into yet another newfangled vehicle that has come to be known as CV-squared.

Now there’s more.

Firms including Bain Capital and Leonard Green & Partners have started using commitments to continuation funds as collateral, giving ...