The Insight by Oaktree Capital
NAV Finance 101: The Next Generation of Private Credit
Mar 7, 2024
Explore the benefits and growth of NAV finance in the private credit landscape, including liquidity enhancement, risk management strategies, and the projected market size of $145 billion by 2030. Learn how NAV finance can create value, manage portfolios efficiently, and play a crucial role in the next generation of private finance.
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Quick takeaways
- NAV finance provides non-dilutive capital based on asset value for private equity, aiding liquidity and value creation.
- The growth of NAV finance offers strong downside protection and long-term returns, aligning interests for lenders and borrowers.
Deep dives
Overview of Nav Finance
Nav Finance involves private capital solutions based on the net asset value of investment portfolios, offering non-dilutive capital as debt or senior equity. It is tailored for the private equity industry, providing liquidity, value creation, and portfolio management. With growing assets under management in private equity, Nav Finance's adoption has increased, characterized by bespoke loans with common features like senior ranking, collateralized investments, and long maturities.
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