NAV Facilities: A Promising Vaccine For Ailing Funds?

Much has been written this year about liquidity solutions for funds due to the economic issues caused by Covid-19.  In particular, the spotlight has been on NAV facilities and other bespoke financings as an area poised for growth, given their potential to unlock liquidity for fully-invested funds.  While it is yet to be determined whether these will be the saving grace that GPs are hoping for to steer them through these troubled waters, there are a number of practical issues which will need to be considered when looking at a NAV facility (or other bespoke financings).

Given that such facilities are often considered for specific liquidity purposes which may not have been contemplated when the fund was initially set up, it may not be a simple process to put in place a NAV facility.  Unlike traditional subscription facilities which are generally put in place at the start of the life of a fund (with the fund documentation therefore typically contemplating these