Cloud 9fin How funds are NAVigating the M&A lull
Nov 6, 2024
Peter Benson, a private credit reporter at 9fin, dives into the intricacies of NAV loan structures during a challenging M&A environment. He discusses the shift toward NAV lending as a flexible liquidity solution amid low deal activity. Expect insights on how NAV loans compare to traditional financing methods and the evolving role of private credit firms in this landscape. Benson also highlights the implications of Federal Reserve policies on future M&A activity and the structural challenges private equity sponsors face in adapting to current financial realities.
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NAV Lending Explained
- NAV lending is like a subscription line, but it uses existing assets as collateral.
- It helps private credit funds manage their investments and liquidity.
Dedicated NAV Lending Vehicles
- The rise of dedicated NAV lending vehicles shows a growing market segment within private credit.
- This suggests increasing demand and specialization in this area.
Drivers of NAV Lending
- Oversaturated direct lending and borrowers' need for flexibility drive NAV lending's rise.
- This is influenced by the current constrained M&A market.