As investors continue to clamor for direct lending strategies by private fund managers, legal advisers have kept pace by developing sophisticated fund structures to help manage the tax issues prompted by loan origination. For additional considerations when structuring direct lending funds, see part two of our three-part series on hedge funds as direct lenders: “Structures to Manage the U.S. Trade or Business Risk to Foreign Investors” (Sep. 29, 2016). In a recent program, Kramer Levin Naftalis & Frankel partners Barry Herzog, Kevin P. Scanlan and George M. Silfen discussed four structuring options available to managers seeking to launch a fund that will engage in loan origination. This second article in our two-part series examines treaty-based fund structures and privately offered closed-end direct lending funds. The first article discussed common investment terms for direct lending funds; provided an overview of the tax implications of loan origination activity to foreign and U.S. tax-exempt investors; and discussed how the “season and sell” and blocker structures can minimize the potential tax consequences of loan origination. For more on direct lending, see “The Current State of Direct Lending by Hedge Funds: Fund Structures, Tax and Financing Options” (Oct. 27, 2016).