NAV Financing

Private equity NAV financing is typically secured against buyout-stage private equity funds, where underlying assets are more mature and generate more predictable cash flows. This provides lenders with greater visibility on performance and exit timelines, resulting in lower risk structures, more stable pricing, and longer-term NAV financing solutions.

Venture capital NAV financing, by contrast, is secured against growth-stage venture capital funds, where investments are earlier in their lifecycle and outcomes are less certain. While this introduces a higher risk profile, it also offers greater upside potential. As a result, venture capital NAV financing structures are often more flexible and may include participation features to align with the performance of the underlying portfolio.

Yes. NAV financing allows borrowers to borrow against private equity and venture capital fund interests, including both GP and LP stakes. This form of financing is secured against the underlying value of the fund portfolio, rather than personal income or liquid assets.

By using NAV financing, investors can access liquidity without selling fund positions or waiting for distributions, enabling them to retain full exposure to future upside while unlocking capital for other opportunities.

NAV financing is typically used by General Partners (GPs), Limited Partners (LPs), fund managers, and senior professionals with exposure to private equity or venture capital investments, including carried interest.

These individuals often have significant capital tied up in private market fund interests, but require liquidity without selling positions. NAV financing provides a solution by enabling them to unlock liquidity from private equity and venture capital portfolios while maintaining full exposure to future returns.

NAV financing is secured against illiquid private equity and venture capital fund interests, meaning valuation and timing are key considerations. Unlike public markets, these assets are not continuously priced, so lenders rely on conservative loan-to-value ratios and structured downside protection to mitigate risk.

Legal and structural factors also play an important role. Fund documentation, shareholder agreements, and transfer restrictions can affect how financing is arranged and enforced. As a result, NAV financing requires careful underwriting and specialist structuring to balance flexibility with effective risk management.

NAV financing is structured around the value and characteristics of underlying fund interests, with lenders placing significant emphasis on risk management and downside protection.

A key consideration is the illiquidity of private equity and venture capital investments, as these assets cannot be easily sold. Valuation is also less frequent than in public markets, meaning timing and accuracy of NAV assessments are critical to structuring the facility.

Legal structure plays an important role, with fund documentation, transfer restrictions, and ownership rights all influencing how lending can be arranged and enforced. To mitigate these factors, lenders apply conservative loan-to-value ratios and robust downside protection mechanisms, ensuring the structure remains resilient across different market conditions.

In many cases, NAV financing can be structured on a non-recourse basis, meaning the loan is secured primarily against the underlying fund interests rather than the borrower’s wider personal assets.

However, this depends on the strength and diversification of the portfolio, as well as the lender’s risk appetite. In some situations, additional support such as guarantees or supplementary collateral may be required to enhance terms.

Timelines for NAV financing vary depending on the complexity of the structure and the underlying fund portfolio.

For well-documented private equity or venture capital exposures, indicative terms can often be provided relatively quickly, with full execution typically taking a number of weeks. Transactions involving more complex structures or multiple fund interests may require additional time for due diligence and structuring.

NAV (Net Asset Value) financing is typically used by investors and fund managers to unlock liquidity from their private equity, venture capital, or alternative investment portfolios without needing to exit underlying positions.

Common uses include portfolio diversification, capital calls, follow-on investments, refinancing existing facilities, bridging short-term liquidity gaps, or funding personal or corporate opportunities while maintaining long-term exposure to the underlying funds.

Because NAV financing is structured against the value of fund interests rather than individual underlying assets, it is generally used by sophisticated investors who are comfortable with fund-level leverage and longer-term investment horizons. Lenders will assess the quality, diversification, and liquidity profile of the portfolio when structuring the facility.

Working with a specialist broker can help ensure the financing structure aligns with the investor’s broader strategy and the specific characteristics of the underlying fund holdings.