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

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Fund finance is a market in flux

Magazine
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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.
Magazine

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.
Magazine

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.
Magazine

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.
Magazine

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.
Magazine

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.
Magazine

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

Magazine

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
Magazine

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
Magazine

How do I choose a lender?

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Borrowers are facing more options than ever, creating a selection challenge for CFOs
Magazine

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.
Magazine

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
Magazine

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

News & Analysis

AlpInvest’s ‘musical quartet’ fund interest ABS enchants investors

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Diverse collateral mix of secondaries, portfolio finance and co-investments helps Carlyle unit close above target on $1bn.
Illustration of an arrow made up of blue dollar signs, with a hand removing a single red dollar sign
News & Analysis

Rated note feeders in flux – Part 4

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In the final installment of this guest article, Seward & Kissel partners Greg Cioffi and Jeff Berman peer into the future of the RNF market and highlight the importance of using bankruptcy remote structures.
News & Analysis

Rated Note Feeders in Flux – Part 3

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In part three of this four-part guest article, Seward & Kissel partners Greg Cioffi and Jeff Berman look at issues that arise with RNFs when the underlying fund enters into a subscription facility.
News & Analysis

The market myth of the asset-backed bogeyman

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Learning from the past is about asking the right questions. Whether the sub-line ABS heralds the second coming of the synthetic CDO and subsequent apocalypses isn’t one of them.
An illustration of a businessman standing in front of a growth chart
News & Analysis

Goldman’s sub line ABS heralds new era in fund finance

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Bank leaps over hurdles to make a product that could reshape the fund finance industry.

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