NAV finance market “never been healthier”
Demand for net asset value (NAV) finance has “never been healthier”, according to 17Capital partner David Wilson, with the market predicted to grow to $145bn (£107.5bn) by 2030.
NAV facilities make up a key part of the growing fund finance market. According to Goodwin, fund finance surpassed $1.2tn in 2024 and is on track to reach $2.5tn by 2030.
Numerous factors are driving this, with demand for NAV facilities now playing a greater role.
“Our prediction is that, by 2030, deployment of NAV facilities will have grown to around $145bn from around $20bn in 2020, as the asset class matures,” said Wilson.
Read more: Exclusive interview with 17Capital’s Stephen Quinn
This optimism comes against a backdrop of greater market uncertainty and higher volatility. Managers are being forced to look elsewhere to generate value in portfolios, which is boosting demand for NAV facilities, according to Arcmont Asset Management’s head of NAV financing Peter Hutton.
“We believe the current macro uncertainty (e.g. Trump Tariffs) is a significant tailwind for adoption of NAV financing,” said Hutton. “[This type of facility] – as a relatively simple and cost-effective way to significantly enhance capital availability for bolt-on M&A – is a natural way for sponsors to enhance fund returns.”
Read more: Macfarlanes: NAV financing is “hot topic” in fund finance
Specifically in Europe, Protiviti managing director Luca Medizza expects the fund finance market to remain active throughout 2025. He expects continued growth across three segments: refinancing of subscription lines for funds nearing extension periods; NAV and hybrid facilities used for distribution planning or interim liquidity; and solutions supporting continuation vehicles or illiquid strategies.
“Deal activity is expected to remain strong, supported by continued interest in alternative financing structures such as NAV and hybrid facilities,” added Medizza. “European private capital deal activity is showing recovery after the turbulence of recent years, with signs of uptick in mid-market private equity and a broader appetite for new transactions.”
