ADIA to anchor $1bn Pemberton NAV financing strategy

Pemberton Asset Management expects a first close in excess of $1bn (£787m) in commitments for its new net asset value (NAV) financing fund after signing on Abu Dhabi’s sovereign wealth fund as an anchor investor.

A subsidiary of the Abu Dhabi Investment Authority (ADIA) has agreed to invest in the NAV Strategic Financing strategy, which is set to have its first close in the coming weeks.

The strategy will provide non-dilutive strategic capital solutions to private equity general partners and funds, to support fund commitments, succession planning and strategic initiatives.

“We believe that NAV financing will become a core fund financing tool and, with ADIA’s support, we look forward to offering this innovative solution to our clients,” said Symon Drake-Brockman, managing partner of Pemberton.

Read more: Boom in NAV financing set to continue

Hamad Shahwan Aldhaheri, executive director of the private equity department at ADIA, added: “NAV Financing is one of the fastest growing asset classes in private credit and we are confident Pemberton’s new strategy will prove attractive to a broad range of GPs.”

NAV financing has become more popular over the last year, with demand rising as GPs look to address the liquidity squeeze within private markets.

Read more: NAV finance market forecast to grow to $145bn by 2030

Some estimates suggest it will go from $100bn as of 2023 to $600bn in six years’ time. Several fund managers have launched strategies, looking to take advantage of the rising interest. These include Axa IM and AllianceBernstein, which set up a new lending business at the end of last year.

However, the Bank of England has raised concerns about increasingly popular NAV financing in the private equity world, due to opacity around the quantity of leverage entering the system.

Read more: BoE sounds the alarm on NAV financing