Fund Finance

There are concerns over macroeconomic stresses and leverage, but net asset value finance has proved resilient – and many expect that to continue.

As debt markets tighten, LPs are becoming more particular about how managers use subscription credit lines and NAV finance, writes Nicholas Neveling.

The consistent movement of market share from banks to credit funds has now spread in a big way to APAC.

Banks hitting concentration limits and syndicating deals, insurance companies coming in as both buyers and lenders, and even rising interest rates all point to a bigger slice of market for non-banks.

NAV structures are now able to suit both borrowers’ goals and investors’ yield targets, but some are worried certain structures go too far, including one that essentially gives borrowers equity at the cost of debt.

Credit fund managers are increasingly looking for liquidity, but in the past their options have been limited.

Having started life purely as a direct lender, the UK-based fund manager has recently launched several other strategies. John Bakie met with co-founder Symon Drake-Brockman to find out more

The firm, which has raised €2.6bn for its debut lending fund, is agnostic about whether it’s viewed via a preferred equity or credit lens.

The firm’s first credit fund comfortably beat its €1.5bn target to lend to private equity managers seeking growth or LP liquidity.

The firm hopes to tap into demand for late-cycle lending among the private equity fund community.