Using Insurance To Add Value In Fund Finance

As both banks and private credit funds step up fund finance activity, insurance could provide crucial competitive advantage.

In a fast-growing fund finance market, lenders need agility and capacity to meet demand, while supplementing strong credit risk management. Non-payment insurance, protecting lenders against fund/borrower defaults, could provide many of the answers. An increasing number of fund finance lenders see insurance as a critical enabler of continued and accelerated growth.

Benefitting banks and private credit funds

For bank lenders, insurance can support fund financing activity in several ways. One significant opportunity is to use insurance to secure limit relief. Where banks are moving close to their internal credit limits with a particular fund or asset manager, insurance makes it possible to leverage additional lending while carefully managing exposure.