NAV Financing
Net Asset Value (‘NAV’) Financing is a flexible financial tool, increasingly used by Private Equity Sponsors (‘Sponsors’) for a broad range of applications1.
In NAV Financing, Sponsors use the value of their underlying assets as collateral to raise capital, with proceeds typically invested back into the portfolio assets with the aim of enhancing value creation2.
- Rising Popularity of NAV Loans & Key Considerations, Bloomberg Law (March 2024).
- ILPA Guidance on NAV Facilities (2024).
Highlights
- Diversified, asset-backed lending to the Private Equity ecosystem
- Proprietary origination via 390+ European and U.S. mid-market PE Sponsor transaction partners
- Robust, bottom-up underwriting leveraging existing Sponsor and asset knowledge
- Underserved market with high barriers to entry
- Providing a ‘one stop shop’ solution both at the asset and Fund/GP level
Attractive market opportunity
NAV Financing is rapidly emerging as a standalone asset class, similar to where Direct Lending was in 2010. NAV Financing offers several distinct benefits:
- Attractive risk/return potential
- Diversified collateral with multiple sources of repayment
- Conservative LTVs and strong downside protection
- Senior lending with security package
- Floating rate, with hedge for inflation
Investment Profile
There are broadly three types of NAV Financing transaction in scope, with our focus being Fund Financing.
NAV White Paper
Our solutions
Strategic thinking that cuts through complex challenges.