Fund Finance to the Fore

More than a third (36%) of survey respondents in the 2026 Global Private Equity Outlook survey expect fund finance to increase in the next 12-18 months, which is a significantly more optimistic outlook than a year ago, when only 2% anticipated an increase. 

“There is greater demand for fund-level financing now, and it will increase in 2026. Until economic conditions improve, funds require additional capital from sources other than the usual investors,” one GP says. 

Close to half (46%) of respondents expect their use of fund-level leverage for investment activity to increase in 2026, with facilities such as NAV financing becoming more popular. 

NAV financing – raising debt against the value of portfolio assets held in a fund – is forecast to more than triple in size from US$44 billion in 2023 to more than US$145 billion by 2030, according to Oaktree Capital Management and its subsidiary 17Capital. 

NAV facilities, subscription lines, GP and management facilities and other fund finance lines are being harnessed by GPs in a variety of ways, for uses ranging from reducing capital calls made to liquidity-constrained LPs, funding GP commitments and maximizing the efficiency of their own balance sheets, to making distributions to investors and supporting portfolio companies outside of capital windows. 

“Fund finance is now a fundamental part of the GP toolbox and one of the most efficient ways to inject more liquidity into a deal or fund,” says Sabina Comis, global co-managing partner of Dechert. “The initial increase in the use of fund finance was in response to tighter liquidity, but now that GPs and LPs have become more used to it, it is here to stay.”