Fund Finance Report 2024

From subscription lines to NAV loans, fund financing continues to bolster investors’ capital options

Fund finance markets continue to evolve, especially in the area of NAV lending. In our Fund Finance Report for 2024, we look at the surge in demand for NAV finance amid a slump in M&A markets and ask just how the market has responded to last year’s collapse of three of the most prolific providers of subscription facilities.

COVER STORY

Businessman standing in front of glowing portals

Fund finance is a market in flux

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Depressed fundraising hits subscription finance, but M&A slump boosts demand for NAV
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KEY TRENDS IN FUND FINANCE

FURTHER ANALYSIS

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PREVIOUS COVERAGE

2023

Magazine

Five key trends shaping fund finance

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The fund finance market is finding ways to adapt amid economic uncertainty.
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Crucial questions about NAV: What are the use cases for NAV finance today?

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Climbing interest rates and a reduction in credit elsewhere are spurring demand for NAV loans.
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Crucial questions about NAV: Will rising interest rates curb demand?

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Opinions are divided on exactly what the recent rate spike means for NAV financing.
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Crucial questions about NAV: Is NAV financing a valid alternative to a secondaries sale?

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NAV solutions are being offered to LPs facing liquidity issues.
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Crucial questions about NAV: Who are the main lenders in the NAV market?

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Non-bank lenders are becoming more prominent as banks retrench.
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Crucial questions about NAV: What do LPs really think about NAV finance?

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LPs are generally receptive provided the loans aren’t just an attempt to add leverage.
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Crucial questions about NAV: How big could NAV finance get?

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Projected volumes vary wildly, but there’s little doubt that the market is growing.
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Mixed signals for fund finance

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What do soaring interest rates and economic uncertainty mean for subscription lines, GP loans and the burgeoning world of NAV finance?
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Testing times: The questions everyone is asking about NAV

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A burgeoning asset class is facing its toughest test yet. Will NAV finance emerge from current market turmoil stronger than ever?
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Longevity is key in the shrinking pool of lenders

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In today’s uncertain market, borrowers need to work harder to secure financing.
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Borrowers seek flexibility in a lenders’ market

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With banks constrained by market uncertainty, sub lines are taking longer to negotiate.

2022

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The big questions every CFO should be asking about fund finance

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The fund finance industry is experiencing exponential growth, but there are a number of issues that borrowers need to address
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What do my LPs think about fund finance?

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There is now a broad consensus that benefits in terms of treasury management outweigh the disadvantages
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How will fund finance fare in a downturn?

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Subscription finance’s fortunes will depend to a large extent on the performance of the fundraising markets
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Is there enough lending capacity to meet demand?

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Institutions are stepping in to fill the growing demand for capital call facilities
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How do I choose a lender?

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Borrowers are facing more options than ever, creating a selection challenge for CFOs
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How is ESG impacting the fund finance market?

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ESG criteria are increasingly used to provide rate discounts, but some question the benefits of these facilities
Rocket ship illustration
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Just how big can this market get?

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Only two years ago, the accepted ceiling for the subscription line market globally was $500bn, a figure now seen as wildly underestimated. Meanwhile, NAV financing is poised for meteoric growth
Fund Finance

Q&A with Blue Wolf Capital on subscription finance

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Joshua Cherry-Seto, CFO at Blue Wolf Capital, believes subscription lines are a critical part of working capital.
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LPAs continue to stand in way of NAV financing

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Fund finance lawyers are working around some complex clauses in limited partner agreements
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The rise and rise of ESG-linked lending

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ESG-linked subscription lines are becoming more common, with the market evolving quickly on both sides of the Atlantic
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LP views on the future of fund finance

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Subscription and NAV financing are increasingly accepted by LPs, but transparency is key

LATEST FUND FINANCE NEWS

Net asset value (NAV) value of an entity's assets minus the value of its liabilities concept, cube wooden block with alphabet combine the word NAV on black chalkboard background
News & Analysis

17Capital’s NAV loan report card points to prudence

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The private credit lender reveals numbers for its inaugural fund solely dedicated to the instruments, and they demonstrate a tool best suited for high-performing borrowers.
Wooden tariffs stamp, from Getty Images.
News & Analysis

KBRA: Tariffs won’t rattle fund finance debt

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The rating agency cites LTV triggers and scheduled amortization as bulwarks against trade-driven volatility.
News & Analysis

Skies clear over fund interest ABS market

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US insurance regulatory updates reduce uncertainty for the instruments.
News & Analysis

Pemberton finds new European NAV origination head in-house

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The private credit manager is elevating a firm veteran for the key regional role.
Purple building blocks spelling the word 'NAV'
News & Analysis

PE CFO veteran lands at NAV lender

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Velocity Capital Advisors, which will lend to lower-middle and mid-market firms, has taken on a long-time PE CFO

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