NAV lending is evolving from a niche financing tool into what panellists described as a core liquidity solution across private markets, driven by changing LP expectations, fundraising pressures and sophistication in portfolio financing structures, according to panellists at the European Fund Finance Securitisation Forum, organised by Funds Europe in partnership with Alfi.
Moderating the discussion, Fabrice Guesde, managing director – credit markets and global head of fund financing, Natixis, positioned NAV financing as part of a broader portfolio financing ecosystem, adding that the market should move beyond viewing NAV lending as a standalone product. He described it as a “missing link” between subscription finance and asset-level financing, particularly when hybrid structures are used to enhance protections and improve liquidity management.
Sana Jivani, director at credit rating agency KBRA, said it has seen NAV lending move “from niche to central” over recent years, with 2025 marked by an increase in first-time borrowers entering the market. According to Jivani, this reflects wider acceptance of NAV facilities as a legitimate financing tool across private markets. Jivani added that performance across rated facilities has largely met expectations so far, with some transactions experiencing positive credit migration due to proactive borrower management and repayment mechanisms. “The structures are doing what they were intended to do,” she said, while cautioning that continued performance would depend on lenders maintaining disciplined underwriting standards and attention to concentration and observation risks.
Brad Mitchell, principal – capital markets, Pantheon Ventures, said that NAV financing itself is not new, pointing out that investment trusts and similar vehicles have relied on such structures for years. What has changed, he said, is the level of adoption and the increasing number of use cases attached to the product.
“We’ve got a fundraising and distribution environment that’s making people think differently,” Mitchell said. He added that LPs are now actively asking managers about NAV financing capabilities, making the product a more expected component of fund management strategy.
Mitchell also said that NAV facilities can improve investor outcomes when used appropriately, particularly in continuation vehicles and diversified portfolio structures. “It’s the last piece of the jigsaw,” he said, referring to the industry’s push to improve performance and investor experience.
Cassandra Fahy, managing director and co-head of NAV financing and GP solutions origination, Pemberton Capital Advisors, said adoption and awareness among private equity sponsors had “dramatically” increased over the last 24 months. She noted that the conversation has shifted away from viewing NAV lending purely as a distribution tool, with managers exploring multiple applications.
These include supporting portfolio companies, refinancing asset-level debt originated during the low-interest-rate environment and managing liquidity during slower fundraising cycles. “Used correctly, with the right cash-flow controls and concentration limits, it can be a versatile tool,” Fahy said.
Doug Murning, partner and co-head of fund finance at Cadwalader, said LPAs are receiving greater focus in NAV transactions, particularly in newer funds, although he had not seen deals fail because of LPA restrictions. He said portfolio financing structures have become more fluid over time, with no “one-size-fits-all” approach. “Portfolio financing is a technique,” Murning said, adding that transactions require lenders and sponsors to remain “open-minded on both sides”.
Steve Berry, managing director at NLC, said banks still account for most NAV financing activity, although institutional capital providers are becoming active as the market evolves. He added that securitisation regulation was initially viewed as more relevant to public markets, but borrowers are now becoming more sophisticated around securitised and non-securitised execution formats. “Borrowers are now increasingly aware” of alternative structuring options, Berry said, adding that investor comfort with private markets is supporting expansion in NAV financing.
Despite differing views on structure and regulation, panellists agreed the market’s growth is unlikely to slow.
