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Q4 2023
PitchBook Analyst Note: NAVigating Considerations and Controversies Around NAV Loans
December 12, 2023
Navigating the upsides and downsides of NAV loans
As fundraising slows and exits stagnate, PE fund managers are increasingly employing creative portfolio management strategies.
Net asset value (NAV) loans, which are credit facilities secured against a fund, have become one of the financing tools used to fill this demand for liquidity. The NAV loan market is forecast to grow sixfold to $600 billion by 2030.
Despite their growing popularity, NAV loans have potential pitfalls. Our latest analyst note examines the growth of the NAV lending market and the pluses and minuses of such loans.
Table of contents
| Key takeaways | 1 |
| Introduction | 2 |
| What are NAV loans, and what has driven their popularity? | 4 |
| History of NAV loans | 6 |
| Borrowers and use cases | 8 |
| What are the potential downsides of using a fund-level NAV facility? | 10 |
| How do lenders diligence a portfolio? | 12 |
| How are NAV facilities structured and priced? | 14 |
| Conclusion | 19 |