The increase in the use of fund finance by private equity is carrying over into the infrastructure fund space, with managers using net asset value and back-leverage facilities to unlock liquidity for investors and portfolio assets
Net asset value (NAV) finance—where sponsors borrow against the NAV of the assets in the funds they manage—is growing at pace, and infrastructure managers are using the product in increasing numbers. This includes both portfolio-wide NAV financings as well as single or concentrated back-leverage facilities supported by unsecured recourse to the fund’s NAV.
The NAV finance market, now valued at US$100 billion globally, is forecast to expand sevenfold by 2030 to become a US$700 billion market, according to Pemberton Capital Advisors.
Initially, the uptick in the use of NAV finance was spurred by the increasing appetite of private equity sponsors who…
