Leverage Creeps Into More Private Assets as NAV Loans Spread (1)

From real estate to infrastructure to stakes in unsold private companies, funds are turning an ever-growing array of assets into collateral for new loans.

Net-asset-value loans — facilities that let funds borrow against the overall value of their portfolios rather than individual companies — are spreading into property funds and attracting firms of all sizes, according to a survey of lenders by placement agent Rede Partners. The loans layer extra leverage onto private companies already carrying heavy debt.

NAV loans are “being implemented in a more diverse range of fund sizes, asset classes, and geographies,” said Magnus Goodlad ...