NAV Facilities and Hybrid Facilities

Summary

This practice note describes net-asset-value (NAV) and hybrid forms of fund finance facilities. These facilities are distinguished from subscription facilities by their different collateral packages, with the hybrid being secured by both uncalled capital commitments and portfolio assets, and the NAV secured by portfolio assets only. This note describes how these facilities differ from each other and from subscription facilities, and how that impacts the timing and availability of borrowings, the due diligence process, and the drafting of covenants, remedies, and other provisions of the loan documents.