The NAV financing market is on track to deploy more than $145bn (£114.3bn) by 2030, as the segment continues to grow in popularity following a strong year.
Earlier this year, Oaktree Capital Management and its subsidiary, NAV financing specialist 17Capital, predicted that the market could grow from $44bn in 2023 to $145bn by 2030 as NAV financing plays a “major role” in the evolution of financial markets.
Read more: Macfarlanes: NAV financing is “hot topic” in fund finance
In a new interview, David Wilson, partner at 17Capital, told Alternative Credit Investor that this target is still in sight.
“We’re on the record of having an expected $145bn of deployment by 2030,” said Wilson. “And we’re on track for that with what we’ve seen in the last 12 months.
Read more: Funds begin using unsecured NAV financing
“Based on what we’re seeing, we absolutely still think that that’s the expectation. We won’t go there immediately, but it will be a continual rapid growth between now and 2030.”
Private equity’s assets under management are expected to double over the next six to seven years and Wilson believes that this will lead to higher adoption by private equity managers of NAV finance into their funds.
“We’re seeing more and more managers using NAV loans in their buyout funds,” he said.
“The number of groups we work with is increasing all the time. When we talk to sponsors now, it’s not a case of will they do it? It’s a case of, when they will do it?
“LPs are more comfortable and better educated on NAV finance and it’s just driving more and more managers to use the tool.”
