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Patricia Lynch Shares Insight on Demand for NAV Financing

Practices: Finance, Private Equity, Sponsor Solutions Industries: Private Equity

In a PitchBook article, finance partner Patricia Lynch notes how PE managers are increasingly using net asset value (NAV) financing to obtain capital in a challenging fund financing market. The demand for NAV facilities quickly grew during Q1 2023 as a result of the tough PE exit environment and the lack of traditional financing sources amid market volatility, according to PitchBook. Attorneys at Ropes & Gray say the volume of inbound inquiries from PE sponsors on NAV facilities has spiked in recent months.

“More underlying portfolio companies are running into liquidity needs, and more sponsors are anticipating that their portfolio companies might have liquidity needs,” Lynch told PitchBook. “ NAV financing can be a great source of liquidity in those situations."

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