Institutional investors and NAV financing

17Capital will enter into a JV to create a $1bn NAV-lending platform.

NAV: Rod James has this scoop on London-based 17Capital entering into a partnership with a ‘significant’ American institutional investor to create a $1 billion NAV-lending platform. It’s the most recent indication of the growth of the asset class, a phenomenon I covered in this deep dive. The firm bills itself as the pioneer of preferred equity financing and NAV-based lending, but has focused primarily on the former.

Institutional investors have been said to be increasingly looking at participation in the NAV financing space; I first heard rumblings about such interest in March while reporting the above deep dive. Some were said to be actively looking into playing in the NAV finance space, building narratives to take to their committees.

It will be interesting to see what kind of institutional investor it is that is stepping in alongside 17Capital. While what some call the ‘concentrated’ NAV lending space is still a relatively small, highly bespoke market, the current crisis has certainly accelerated broader acceptance of its potential.

Email prepared by Graham Bippart