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NAV & Preferred Equity

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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 lawyers are working around some complex clauses in limited partner agreements
NAV structures are now able to suit both borrowers’ goals and investors’ yield targets, but some are worried certain structures go too far, including a structure that essentially gives borrowers equity at the cost of debt.
Banks hitting concentration limits and syndicating deals, insurance companies coming in as both buyers and lenders, and even rising interest rates all point to a bigger slice of market for non-banks.
Near overflowing attendance at the Fund Finance Association’s European Symposium in London, where attendees debated some important new developments in the market
Claire Hedley most recently led GSAM’s ESG client strategy group in London and was responsible for the asset manager’s client facing and commercial ESG efforts across EMEA.
Three managing directors in London were made partners during a growth period in the NAV financing market.
The firm, which has raised €2.6bn for its debut lending fund, estimates the size of this market could grow to $700bn by the end of this decade.
The proliferation of NAV-based lending makes it possible for closed-end funds to transition away from bank credit lines for their currency hedging needs. Mark Battistoni of HedgeNAV LLC explains.
The firm’s first credit fund comfortably beat its €1.5bn target to lend to private equity managers seeking growth or LP liquidity.

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