On 15 April 2024, Directive 2024/927/EU ("AIFMD II") entered into force, which marked a significant milestone for the European asset management industry. AIFMD II will introduce a harmonised framework for loan-originating...more
Net Asset Value (NAV)-based financing facilities (“NAV Facilities”) continue to proliferate in private equity. In response, the Institutional Limited Partners Association (ILPA) released comprehensive new guidance making the...more
The Institutional Limited Partners Association (ILPA), a trade group for institutional investors in the private equity industry, recently published guidance for LPs and GPs concerning fund-level NAV facilities. See here for...more
On 25 July 2024, the Institutional Limited Partners Association ("ILPA") published guidance (the "Guidance") on the use of net asset value ("NAV") facilities. The Guidance specifically applies to private equity funds and does...more
While the market for NAV financings—loans to funds supported by the net asset value of their portfolios—grew in 2023 and continues to rapidly evolve, a consensus has developed around what is sometimes referred to as a “Holdco...more
NAV loans are getting constant coverage in the press now. For those of us that spent years trying to direct focus to the potential of NAV lending, this is a welcome development. Admittedly, not all of the coverage is...more
The CSSF has issued a new circular (Circular 24/856) aiming to protect investors in the event of certain errors and breaches. Circular 24/856 will enter into force on 1 January 2025 and will repeal circular 02/77....more
Luxembourg and the Cayman Islands are two of the world’s leading fund formation jurisdictions, and account for a large portion of the private equity funds domicile market. Most private equity fund structures are comprised of...more
With fluctuating capital availability, broadly tightening terms, increasing sponsor demand and pressure on pricing in particular on capital call facilities, the market has been changing, if not challenging, for fund borrowers...more
"Fund managers will continue to innovate and be creative in how they address challenges in the market. For example, fund and portfolio level restructurings will progress at a steady pace to address limitations on exit...more
ESMA has submitted its proposals for RTS supplementing ELTIF 2.0 to the European Commission - The RTS detail stringent conditions on liquidity and redemption provisions including in principle maximum quarterly redemption...more
The year 2023 presented the fund finance industry with many challenges that it rose to face with an inventiveness and rigour that showed just how mature and multi-faceted the market has become. At Cadwalader in London we saw...more
Net asset value based credit facilities (“NAV Facilities”) are credit facilities pursuant to which the availability thereunder is based on the net asset value of the investments of the borrower, typically a private fund. The...more
Recent years have seen significant growth and innovation in the fund finance industry — and, with an increase in the number and complexity of products in the market, it has become commonplace for industry publications and...more
Loan Origination Funds Have a Lot of Wood to Chop Before Aifmd II Kicks In - Following a review of the AIFMD, the Commission, in a draft amending directive published in 2021, noted that common rules should be laid down to...more
Directors of Cayman Islands hedge funds must conduct a fund’s affairs in a transparent and honest manner, always disclosing to the Cayman Islands Monetary Authority's ("CIMA") any substantive issues which could materially...more
Today, the Securities and Exchange Commission, by a vote of 3 to 2, approved amendments to Rule 2a-7 and other rules that govern money market funds under the Investment Company Act of 1940 (Amendments). Among other things,...more
In its most simple form, a net asset value-based facility (“NAV Facility”) is a credit facility, whereby availability under the facility is based on the net asset value of the portfolio investments of the borrower, often a...more
Fund finance is positioned for record levels of growth as private equity (PE) general partners (GPs) tap traditional subscription and net asset value (NAV) financing lines in greater numbers....more
One aspect of NAV loans that lenders often focus on is the risk of “bad acts” by a borrower with respect to the investments that underpin the loans. For our purposes, NAV loans are loans to alternative investment entities...more
For funds that are nearing the end of their investment period and have limited or no remaining unfunded capital commitments, the need to continue a subscription line facility for ongoing liquidity may continue to exist for...more
This article focuses on how private company and private fund interests are typically valued in NAV loan facilities and the increased focus we have seen lenders place on valuation issues since the beginning of the...more
Demand for net asset value (NAV) finance—where private equity (PE) firms raise borrowings against the NAV of the assets in their funds—is on the rise. NAV finance is still a relatively esoteric, industry-specific product, and...more
Manager and investor interest in open-end real estate (“OERE”) funds focused on Asia investments has exploded in recent years, with continued growth expected. CBRE recently estimated that Asia-Pacific-focused open-end funds...more
The use of net asset value finance by private equity firms has spiked under COVID-19 as managers explore new sources of liquidity in a weak M&A market - Until recently, net asset value (NAV) finance—where PE sponsors...more