As Net Asset Value (“NAV”) credit facilities continue to grow in popularity, we have seen a steady increase in non-traditional borrowers utilizing NAV loans, including family office borrowers. The term “family office” is used to describe structures established by ultra-high-net worth families to manage and grow their wealth. NAV facilities allow family office borrowers to unlock liquidity required to meet their needs without selling off investments. The purpose of this article is to explore a few key features that we often see in family office NAV facilities.
Join Scott Aleali, Head of Private Equity Finance at Citizens Bank, and Jeff Maier, Senior Managing Director - Private Equity Finance at Citizens Bank, with special guest Jason Donner, CFO of Veritas Capital, for the latest Fund Fanatics episode.
This week, Cadwalader had the pleasure of hosting students from Fordham University for an engaging introduction to the world of fund finance.
Last week, members of Cadwalader’s fund finance and securitization teams traveled to New Orleans for the ABA Business Law Section Spring Meeting.
Net asset value facility documentation, at least in the context of private equity, has evolved to a large extent on the assumption that borrower funds will usually execute transactions in cash - paying cash on completion for assets acquired, and similarly disposing of assets for cash. The broad drafting assumption has also typically been that distributions by fund borrowers to their investors will almost always be made in cash. However, these assumptions are not always borne out in practice.
Right after Patrick Calves wrote about “continued momentum in the secondaries market, supported by both cyclical and structural tailwinds” in last week’s FFF, Yale University’s plans to sell up to $6 billion is dominating private equity news this week.