As Net Asset Value (“NAV”) credit facilities continue to grow in popularity, we have seen a steady increase in non-traditional borrowers utilizing NAV loans, including family office borrowers. The term “family office” is used...more
Net asset value (NAV) facility documentation, at least in the context of private equity, has evolved to a large extent on the assumption that borrower funds will usually execute transactions in cash - paying cash on...more
Introduction - NAV facilities operate by taking a portfolio of assets owned by a borrower and selecting which assets within that portfolio a lender is willing to lend against. This pool of approved assets becomes the...more
A recent trend in continuation vehicles involves traditional private equity sponsors serving as the “lead investor” in lieu of, or in addition to, more traditional secondary buyers and institutional investors. This expansion...more
The market for financing pools of interests in private equity funds and private credit funds continues to sizzle, with new lenders joining the market and competition on pricing leading to a tightening of spreads for the most...more
The purpose of this article is to unpack the basic building blocks of what constitutes a NAV Loan to make sure that market participants have a basic understanding of what is in a NAV Loan and their key negotiated issues. As...more
The Pine Cliffs Resort hosted the FFA’s 2024 Global Leadership Summit this week where key players and leaders from across the industry gathered to discuss macroeconomic, geopolitical, policy, legal, regulatory and other...more
Executive Summary - In net asset value (NAV) facilities, the borrowing capacity typically adjusts to reflect changes to the value of the underlying investment portfolio, and borrowers face the risk of potential borrowing...more
EXECUTIVE SUMMARY - Net Asset Value ("NAV") credit facilities are lending arrangements underwritten on the borrower’s portfolio of investments, where the amount available for borrowing is based on the value of such...more
On 25 July 2024, the Institutional Limited Partners Association ("ILPA") published guidance (the "Guidance") on the use of net asset value ("NAV") facilities. The Guidance specifically applies to private equity funds and does...more
Executive Summary - Net Asset Value (“NAV”) credit facilities are a tool that borrowers may use to access financing based on the value of their underlying investment portfolio. The users of these facilities are generally...more
Net Asset Value ("NAV") credit facilities are lending arrangements underwritten on the borrower’s portfolio of investments, where the amount available for borrowing is based on the value of such underlying portfolio...more
Coller Capital’s recently released Global Private Capital Barometer included a few notable takeaways for fund finance lenders that suggested the fundraising market could be broadening and capital circulation improving. Here...more
While the market for NAV financings—loans to funds supported by the net asset value of their portfolios—grew in 2023 and continues to rapidly evolve, a consensus has developed around what is sometimes referred to as a “Holdco...more
NAV loans are getting constant coverage in the press now. For those of us that spent years trying to direct focus to the potential of NAV lending, this is a welcome development. Admittedly, not all of the coverage is...more
NAV facilities come in all shapes and sizes and, unlike subscription facilities, there is no standardised collateral package for these kinds of transactions. In the European market, many lenders - particularly investment...more
In the middle of 2023, we conducted an informal, small-scale survey to gather insights from prominent non-bank lenders on their activity in the net asset value (NAV) lending market for the first half of 2023. We have expanded...more
With fluctuating capital availability, broadly tightening terms, increasing sponsor demand and pressure on pricing in particular on capital call facilities, the market has been changing, if not challenging, for fund borrowers...more
The year 2023 presented the fund finance industry with many challenges that it rose to face with an inventiveness and rigour that showed just how mature and multi-faceted the market has become. At Cadwalader in London we saw...more
Recallable capital is a hot topic these days in both subscription financing and NAV financing transactions, both at industry events and in the press. There has been a good deal of attention to this concept in the NAV market...more
As noted in Angie Batterson’s wonderful panel at our Finance Forum in Charlotte last month, the term NAV loan means different things to different people, and can encompass a diverse mix of structures and asset classes in the...more
Here’s what we’re reading these days. Less than half of private credit borrowers would generate positive free cash flow in a mild stress scenario, according to a recent analysis by S&P Global Ratings that reviewed more...more
It’s already been two weeks since we wrapped up the Cadwalader Finance Forum in Charlotte, which featured a panel on “New Approaches in the NAV and Secondary Market.” The panelists provided attendees with an entertaining and...more
It has been a common refrain in the fund finance industry that “hybrid” loan facilities (i.e., loans underwritten on the basis of both a fund’s investor capital commitments and its investment portfolio) are constantly talked...more
Net asset value based credit facilities (“NAV Facilities”) are credit facilities pursuant to which the availability thereunder is based on the net asset value of the investments of the borrower, typically a private fund. The...more