Caspar Nixon | Strategic Corporate Affairs Leader
CONTENTS
As the private equity landscape matures and expands, fund managers are seeking smarter, more adaptable ways to manage capital — not just to support portfolio companies, but also to finance their own evolution. One financing tool rapidly gaining traction in this space is Net Asset Value (NAV) finance.
Although NAV finance has existed for over a decade, recent years have seen it move from a niche tool to a mainstream capital solution. In this environment of lengthening fund durations, record-high holding periods, and increasing complexity across geographies and strategies, NAV finance is enabling private equity firms to navigate liquidity needs, expand operations, and improve fund performance — all without diluting equity.
A Financing Tool for the Modern PE Firm
NAV finance, at its core, is capital provided against the value of a portfolio’s underlying assets. Unlike subscription lines used at the beginning of a fund’s life, NAV finance is deployed after investor capital has been drawn and the fund holds mature, operating assets.
Depending on the level of diversification and the goals of the borrower, financing structures can range from conservative NAV-based loans to more flexible preferred equity arrangements. At Turning Point Capital, both models are offered — providing firms with optionality based on risk appetite and capital needs.
Use Cases: From Liquidity to Leadership
NAV finance is proving useful across a growing range of scenarios. One of the most strategic is funding new investments before a follow-on fund is raised. If dealflow accelerates but capital is constrained, NAV-backed credit can bridge the gap.
It’s also being used for internal transitions. For example, if a GP seeks to realign its shareholder base — supporting succession plans or partner exits — NAV finance can offer a non-dilutive capital source.
“NAV structures allow for far more strategic flexibility than equity raises,” says Olympia Shabangu, Director Capital Markets at Amicorp Capital (DIFC) Ltd. “For GPs looking to expand into new geographies or build out differentiated strategies, this is a compelling and scalable solution.”
Shabangu, who specialises in structured finance and capital markets solutions, has seen a notable uptick in NAV usage among both mid-market and large-cap sponsors.
Who’s Using It — and Why
NAV finance has found its strongest adoption among US and European buyout funds, particularly at the top of the market. In 2021, 80% of Turning Point Capital’s deals were with the top 100 GPs globally — including multiple top-10 managers. These firms often have dedicated capital markets teams exploring non-traditional funding sources, and they appreciate the non-dilutive benefits of NAV structures.
That said, interest is growing among mid-market funds and sector specialists. Growth equity and infrastructure managers, with their longer-duration strategies, are especially well-suited to NAV solutions. The ability to monetise part of a mature portfolio without exiting is proving increasingly attractive.
Competition, Convergence, and the Future
While the NAV finance space is not yet crowded, it’s attracting attention. Low-LTV lending is seeing more entrants, though fewer players operate in the 10–25% LTV space, where pricing and structure are more complex. Preferred equity — a more flexible alternative — is also seeing new interest from secondaries and credit funds looking to expand their offerings.
Still, few are pure-play NAV providers with the scale and history of Turning Point Capital.
Looking ahead, NAV finance is likely to become as ubiquitous as subscription credit lines. Once funds exhaust traditional commitments, NAV structures offer a logical and powerful next step. And as performance dispersion widens between top-quartile funds and the rest, access to NAV finance may become another competitive differentiator.
From Alternative to Essential
NAV finance is no longer an outlier tool — it’s becoming a mainstream pillar of private equity capital strategy. In an increasingly complex, competitive, and capital-intensive environment, managers who leverage NAV solutions are finding new pathways to liquidity, growth, and outperformance.
And for investors, that means better-managed cashflows, stronger IRRs, and greater confidence in the long-term trajectory of their capital.
