The marketing period and the exclusivity period run on different clocks.

A fund raised around a known first asset has two periods running at once, and nothing makes them end together. The marketing period runs from the first approach to the final close and is governed by the placement regimes of every state the register sits in, each with its own lead times, permits, diligence periods and post-close reporting, and by the time a first close actually takes once the documents are final. The exclusivity or option period runs from the seller's grant to its expiry and is governed by a document the seller drafted, with a date the seller chose for the seller's reasons: a liquidity need, a tax year, a family's patience, a state body's programme. The two were set by different parties for different purposes, and the fund sits between them with a register that subscribed to the asset and a seller that did not subscribe to the register.

This note sets out the two clocks and who sets each, what happens when either ends first, the sequence that holds them together, the design of the first close to exercise, the bridge between the lender and the seller, what the deck may say about the seed, the seller's own position and how to negotiate the extension in advance, the onshore clocks that lengthen the marketing period, a comparison, a worked timeline as a type, cases, what each party holds, the sequence, questions, terms and what to read.

The marketing clock

The marketing clock is the sum of several clocks the manager does not control. The intermediaries' diligence in each onshore state, which runs before any filing and takes weeks to a quarter. The Kingdom's fifteen days from a complete notification. Kuwait's ten working days on the institutional route and thirty on the general, from complete applications. Qatar's bank diligence and its two weeks' notification where a foreign approval exists. The centre's own notification of the fund. The administrator's onboarding of each holder, with its classification and provenance file. The holders' own investment committees, which meet on their calendars. And the two months a first close takes after the documents are final, which every manager underestimates. A regional raise from a standing start is a quarter at least and often two, and a manager who has run one before plans the second on what the first actually took rather than on what the term sheet hoped.

The exclusivity clock

The exclusivity clock is one clock, set by the seller, in a document with a date. An exclusivity is a negative covenant: the seller will not deal with others for the period. An option is a positive right: the holder may call the asset within the period at a price or a formula. A conditional contract is a sale, conditional on stated events by stated dates. Each has an expiry, and each has a seller who set it with its own reasons in view and who will extend it, if at all, at a price that rises as the expiry approaches and the seller learns how much the buyer needs it. The seller's advisers read the buyer's position as closely as the buyer reads the seller's.

When the exclusivity ends first

The fund has a register and no asset. The deck it raised on described a seed parcel or a seed company; the register subscribed to a vehicle seeded with it; the option has lapsed, or the exclusivity has expired and the seller has sold elsewhere or re-opened the process at a higher price. The constitution's investment policy, if drafted to the seed, is now a policy the fund cannot execute, and the first investors' committee meeting is about whether the fund should exist. The manager's choices are to find a replacement asset that fits the policy, which is a different fund from the one marketed and may need the register's consent; to re-bid for the seed at the seller's new price, which the register did not underwrite; or to return the capital, which is the end of the manager's credibility with that register and with the intermediaries who placed it.

When the marketing period ends first

The fund has an asset under option and not enough capital to exercise it. The first close has happened, with less than the option price; the second close is months away, after Kuwait's permit and the Kingdom's notification for the second tranche; the option expires between them. The manager goes back to the seller for an extension from a position of weakness, or draws a facility it had not planned and may not have the power to draw, or exercises for part of the asset if the option permits, which it rarely does, or lets the option lapse and explains to the first-close register why the seed it subscribed to is not there.

What holds the two together

The sequence, drawn with both clocks in hand, and three design decisions.

The exclusivity period is negotiated with the marketing calendar on the table. Before the seller's date is agreed, the manager draws the marketing calendar state by state: the intermediaries' diligence, the filings and their clocks, the administrator's onboarding, the committees' meeting dates, the two months to first close. The option's expiry is set after the date the last of those can be complete, with a margin, and an extension is priced into the option at grant rather than requested later, because the price of an extension negotiated after the capital has been raised is the capital.

The first close is designed to exercise. A seeded vehicle that cannot exercise its option at first close is a vehicle whose first investors subscribed to a pipeline, and the constitution has to say so. The cleaner design draws enough at first close to exercise, with a capital-call facility sized to the option price in case the register is slow to fund, and with the lender's conditions read against the option's terms before either is signed.

The deck says what the option says. A presentation that names the asset as held when it is under option, or describes the option's period without its conditions, has made a statement the register will rely on, in a placement the regulator can read. The honest description is the seed's state: under option until a date, on conditions, with the exercise funded from first close and a facility.

Why the two clocks are never aligned by accident

The marketing clock is long because it is the sum of other people's processes, each of which is designed to protect somebody other than the manager: the investor, in the placement regimes; the lender, in its conditions; the register, in the administrator's onboarding. The exclusivity clock is short because the seller's interest is in certainty and leverage: a short period keeps the buyer under pressure and the seller's alternatives open. Neither party sets its clock with the other's in view unless the manager puts the two on one page, and the manager is the only party who can, because it is the only party with both documents. A structure that does not hold the two clocks on one page has left the alignment to chance, and chance runs against the party in the middle.

The lender's conditions, read closely

A capital-call facility's conditions precedent commonly require the fund to be formed and notified, the first close to have occurred with commitments of a stated size, the holders to have signed the acknowledgements, the security to be perfected, and, in some facilities, the fund to have no uncommitted obligation to acquire an asset it cannot fund. The last condition is the one that circles back to the option: a lender that will not lend into a vehicle with an unfunded option has made the option a condition of the facility, and the option was granted on the assumption of the facility. The reading is done with the lender's counsel before the option is signed, and the condition is either removed, or the option's exercise is made conditional on the facility, or the first close is sized so that the facility is not needed for the exercise. A manager who reads the facility after the option has discovered the circle at the moment it closes.

The registry's own clock

The asset's state has a registry, and the registry has a practice: the days it takes to record a transfer, the documents it requires, the notarisation and the language, the charge it collects at recording, and whether it will record an option, a conditional contract or a charge at all. The registry's clock is inside the exclusivity clock, because the transfer must be recorded before the option expires in states where the option is not noted, and a transfer that takes three weeks to record in a state whose registry the manager's counsel in the centre has never used is three weeks the option's date must contain. Counsel in the state reads the practice, and the option's expiry is set with the registry's weeks inside it.

The onshore clocks in detail

For a Saudi register, the distributor's diligence precedes the fifteen-day notification, and both precede the close; a distributor appointed when the memorandum is final adds its diligence to the calendar at the end rather than the beginning. For a Kuwaiti register, the licensed person's completeness list precedes the ten working days, and a permit obtained for the first close must be renewed for any close after its anniversary. For a Qatari register, the bank's diligence on the manager's licence and the Arabic prospectus precede the bank's marketing, and the direct route's count runs from the first approach. Each of those is a line on the marketing calendar with a date, and the exclusivity's expiry is set after the last of them.

Where it surfaces

At the seller's re-opening of the process, when the exclusivity lapses before the close.

At the committee, when the extension's price is presented as a cost the register did not underwrite.

At the lender's conditions precedent, when the facility cannot be drawn until the asset is in and the asset cannot be bought until the facility is drawn.

At the registry, when the transfer takes longer than the option's remaining days.

At the first investors' meeting, when the seed the deck described is not in the vehicle.

The cost of getting it wrong

An option that lapses costs the seed and, usually, the manager's credibility with the register that subscribed to it. An extension negotiated at expiry costs the seller's price, which is set by a seller who has read the memorandum and knows the fund has no alternative. A first close sized below the exercise costs a facility drawn on terms the lender sets and a register that learns its seed now costs more. A deck that named the asset costs the seller's consent, and the seller's withdrawal when it learns of the naming. Against those, a week drawing the marketing calendar before the option is agreed, and the price of an advance extension, are the smallest items on the transaction.

The bridge between the lender and the seller

A lender that will not fund until the asset is in the vehicle, and a seller that will not transfer until the price is paid, have described a circle the structure has to break. The break is an escrow, a bridge or a sequence: the first close's capital in an escrow the seller can see, released against the transfer; a capital-call facility drawn on the first close's commitments against the lender's own conditions, which are read for whether the asset must be in the vehicle first; or a completion mechanism in which the transfer and the payment are simultaneous at the registry, which the registry's own practice must permit. Each is designed before the option is signed, because the option's completion mechanics are where the circle is either broken or drawn.

The seller's position and the advance extension

The seller set the date for its reasons, and a manager who understands the reasons can price the extension. A family that needs cash by a date will extend for a payment on account. A state body whose programme requires the scheme to start by a date will extend for a commitment to the programme. A company selling a non-core asset before its year end will extend into the next year for a price adjustment. The advance extension is drafted into the option: a second period, at a stated price or formula, exercisable by the buyer before the first expires. It costs something at grant and it is worth more than it costs, because it converts the seller's leverage at expiry into a term both parties read at the start.

The deck's description of the seed

The seed is described by state in every document: the memorandum, the presentation, the subscription agreement's description of the fund's policy, and the constitution. The state is the instrument and its date: an option to a date, a conditional contract with conditions and dates, a contribution agreement with its valuation. The conditions are stated: the consents, the financing, the registry's recording. The funding of the exercise is stated: from first close, with a facility of a stated size. And the consequence of the seed not completing is stated: the policy continues on the remaining pipeline, or the register may elect to withdraw. A register that read that has subscribed to what it will get.

By clock · by party	Who sets it	What it runs on	What moves it	What happens at expiry
Marketing	The states' regimes, the intermediaries, the committees, the administrator	Diligence periods, filing clocks, onboarding, meeting calendars	Complete filings, early appointments, parallel routes	The close slips
Exclusivity or option	The seller	The document's date	The seller's consent, at the seller's price	The asset is gone or re-priced
Lender's conditions	The lender	The facility's conditions precedent	The lender's consent	No drawdown
Registry	The state	The registry's practice and calendar	Nobody	No transfer

The register's election

The constitution can give the register something to hold if the seed does not complete, and the thing it gives shapes what the deck may say. A constitution that provides that, if the seed is not acquired by a stated date, the manager will convene the committee and the holders may elect by a stated majority to withdraw their undrawn commitments, has told the register the truth and given it a remedy. A constitution that provides nothing has a register that subscribed to a seed and holds a general policy, with the manager's word as the only bridge between them. The election is drafted with the lender in view, because a withdrawal of commitments reduces the borrowing base, and the facility is read for what it permits.

The seed's state, stated

A seed is described in the documents as one of six states, each with its own consequence for the register: a relationship, with nothing binding and no asset; heads of terms, with a price basis and an exclusivity but no right to the asset; an option, with a right to call on conditions by a date; an exclusivity alone, with a negative covenant and no right; a conditional contract, with a sale conditional on named events by named dates; or a contribution, with the asset transferred against units. The memorandum names the state, the instrument, the date and the conditions, and the structure paper carries the state beside the marketing calendar so that the two clocks are read against the right instrument.

A second timeline, for a contribution

Where the seed is contributed rather than bought, the clocks change shape. The contribution agreement has its own conditions, the valuation, the tier's admission of the contributor, the registry's recording of the transfer into the vehicle, and the marketing clock runs to the first close at which the contributor is admitted and the cash investors arrive beside it. The contributor's patience is the exclusivity clock, and it is governed by the agreement's long-stop date. A contribution whose long-stop falls before the first close is a contribution the contributor may withdraw, and the register that subscribed to a seeded platform arrives at an empty one.

The structure paper's page

The structure paper carries a page with both clocks: the marketing calendar, state by state, with each intermediary's diligence period, each filing and its clock, each committee's date, the administrator's onboarding period and the first close, with a margin; the option or contract, with its instrument, its expiry, its conditions, its advance extension and its price; the lender's conditions precedent read against the option's completion mechanics; the registry's practice and weeks; and the party who can move each date. The page ends with the margin between the last marketing date and the exclusivity's expiry, stated in weeks, and a margin below a stated number is a page the manager does not sign the option on.

Reading the page with the seller

A seller who sees the marketing calendar understands why the buyer asks for the period it asks for, and a seller who does not see it reads the request as a buyer's wish for free time. Managers are reluctant to show sellers their placement calendars, and the reluctance costs them the period. The calendar shows the seller that the buyer's date is a date set by regulators and committees rather than by the buyer's convenience, and a seller with its own advisers recognises the regimes. The page is shared in summary, and the advance extension is negotiated against it.

A timeline, as a type

Month zero: a manager takes heads of terms over a portfolio from a family, and before agreeing the option's date draws the marketing calendar: distributor's diligence six weeks, Saudi notification fifteen days, Kuwaiti institutional permit ten working days from a complete application the licensed person needs four weeks to assemble, Qatari bank diligence eight weeks, committees in months four and five, first close in month six. Month one: the option is signed with an expiry in month nine and a priced extension to month twelve; a capital-call facility is term-sheeted to the option price with conditions read against the option's completion mechanics. Month two: the intermediaries appointed and the diligence running. Month four: the filings. Month six: first close, with enough drawn and committed to exercise; the facility signed. Month seven: the option exercised and the transfer recorded with a simultaneous completion at the registry. Month nine: the option's original expiry passes with the asset in the vehicle. Month twelve: the second close.

The same timeline with the option's date agreed first: an expiry in month six, a first close in month seven, an extension negotiated in month five at a price set by a seller who has read the fund's memorandum.

Four cases, as types

A manager takes a six-month exclusivity over a portfolio and begins a regional raise. The Kuwaiti permit and the Saudi notification take the first four months; the first close lands in month seven; the exclusivity has lapsed and the seller has re-opened the process at a price a tenth higher, which the register did not underwrite and the committee will not approve.

A manager grants itself a long option and raises slowly, on the footing that the seller is patient. The seller, whose land has risen in value, finds the option's price formula now favours the manager and litigates the option's validity on a technicality in the registry's form, which the manager's counsel in the centre never checked with counsel in the state.

A manager's first close is sized to half the option price, on the footing that the second close will fund the rest. The option expires between the two; the seller extends at a price; the first-close register learns that the seed it subscribed to now costs more, and the committee asks why the close was sized as it was.

A manager negotiates a twelve-month option with a priced six-month extension, sets the first close for month eight with exercise funded from first close and a capital-call bridge, reads the lender's conditions against the option's completion mechanics, and describes the seed as under option in every document. The exercise happens in month nine, the extension is never needed, and the register holds what it subscribed to.

What each party holds

The manager holds the marketing calendar, the option's date negotiated to it, the advance extension, the first close's sizing and the deck's description of the seed.

The seller holds the date, the extension at its price and the completion mechanics.

The lender holds the facility's conditions, read against the option.

The intermediaries in each state hold their diligence periods and their clocks.

Counsel in the asset's state holds the registry's treatment of the option and the completion mechanics.

The register holds the seed's state as described, and its election if the seed does not complete.

The sequence

1. The marketing calendar is drawn, state by state, before the option's expiry is agreed.
2. The option's period and a priced extension are negotiated to that calendar, with a margin.
3. The first close and a bridging facility are sized to the exercise, and the lender's conditions are read against the option's completion mechanics.
4. The registry's treatment of the option and the completion sequence are confirmed by counsel in the state.
5. The seed is described by state, not by name, in every document, with the funding and the consequence of non-completion.
6. Both clocks are diarised in the structure paper with the party who can move each.

Questions a manager asks

How long should the option be. As long as the marketing calendar plus a margin, with a priced extension beyond it; a seller who will not grant that has told the manager something about the seller.

Can the first close be smaller than the option price. It can, with a facility sized to the difference and a lender whose conditions permit drawing before the asset is in; without both, the first close is a pipeline.

What if the seller wants a deposit. A deposit is a price for the option and is paid from the manager's own resources or from a first close the constitution permits to fund it; a deposit paid from capital raised on a deck that did not mention it is a matter for the committee.

Should the deck name the asset. Only with the seller's written consent to that naming and that audience, and then with the option's conditions beside the name.

What if the marketing period turns out longer than planned. The advance extension is exercised at its price, which the manager knew at grant.

Who holds the diary. The manager's structure paper, with both clocks, their dates, the parties who can move each and the margin between them.

Terms used

Exclusivity: the seller's covenant not to deal with others for a period.

Option: the buyer's right to call the asset within a period at a price or formula.

Conditional contract: a sale conditional on stated events by stated dates.

Advance extension: a second option period at a stated price, negotiated at grant.

Marketing calendar: the state-by-state schedule of diligence, filings, onboarding and committees that ends in a close.

Completion mechanics: the sequence at the registry by which transfer and payment are made.

Bridge: a facility or escrow that breaks the circle between a lender's conditions and a seller's.

What to read

The option or exclusivity agreement for its period, conditions, extension, completion mechanics and the registry's treatment; each placement regime's diligence period and clock; the facility's conditions precedent; the constitution's policy on the seed. On this site, the marketing room under Jurisdictions, the financing room under Structures and the access room on the Land door.