Fund Structure
NAV Facility
Fund-level debt secured against the net asset value of the underlying portfolio, used to fund distributions, follow-ons, or new investments late in fund life.
Unlike subscription lines, NAV facilities are secured by the value of fund assets rather than LP commitments. They have grown rapidly since 2022 as GPs face a slower exit environment and want to return capital or fund follow-on investments without raising additional equity.
The risk profile is materially different. NAV debt sits ahead of LP equity, increases portfolio leverage, and can convert a paper loss into a realized loss if values decline. ILPA has issued specific guidance recommending LPs receive advance notice and detailed disclosure on any NAV facility usage.
LPs should track: facility size as a percentage of NAV, intended use of proceeds, cost of capital, and whether LPAC consent was obtained. Treat unannounced NAV draws as a governance red flag.