London did its very best impression of a Mediterranean city this year as the 10th Annual European Fund Finance Symposium gathered at Old Billingsgate. The heat wave did nothing to dampen enthusiasm; if anything, delegates seemed perfectly happy to stay indoors and debate the latest updates regarding Fund Financing.
Dechert partner Anthony Lombardi joined lenders and fellow advisors on the "Malcolm in the Middle" panel for a wide-ranging discussion on mid-market fund financing that touched on everything from LP concentration mechanics to the unique features of uncommitted facilities and why, for the right borrowers, uncommitted facilities can make a great deal of sense.
The mid-market, as the panel noted early on, means different things to different people. Lenders tend to think in terms of fund size broadly sub-US$2.5 billion AUM. GPs with high-quality LP bases often bristle at the label entirely, pointing out that their collateral can look every bit as compelling as that of a much larger fund. Anthony observed that for mid-market managers, a significant part of navigating the space is simply identifying the right financing partners in the first place, since they rarely have a deep pool to draw from and may lean far more heavily on their advisors and existing relationships than their larger counterparts.
What struck the panel most was how much the landscape has shifted in just the past couple of years. Lenders that once had US$50 million minimum deal thresholds are now comfortable doing US$5 million GP facilities, and private credit providers are now also in the mix alongside the traditional banks. NAV financing and GP facilities are increasingly part of the mid-market vocabulary, GP financing in particular is growing increasingly popular, driven by slower exits, LP pressure to put more skin in the game, and the very real challenge of retaining the best talent.
Anthony raised to the panel that restrictions in fund documentation can be a material point for mid-market managers. He noted that mid-market managers may have (i) never had to contemplated the use of certain facilities at inception of the fund, or (ii) had, in the past, less bargaining power with big LPs to agree more flexible financing and security terms in their LPAs (particularly around terms for NAV financing or GP financing). A fund may look at creative ways to finance their current liquidity needs but will always be limited to what its fund documents permit. For mid-market managers, that point has real teeth. Older LPAs often say nothing about NAV financing, or in some cases quietly prohibit it, meaning a manager who needs to move quickly on a live deal can suddenly find themselves needing LP consent at exactly the wrong moment. Anthony noted that including adequate borrowing and security provisions in the LPA is a much easier exercise to undertake at the fund launch. The good news, however, is that mid-market managers are increasingly considering future financing needs for new launches and pre-emptively for their existing funds, easing some historic friction in the market.
Artificial intelligence got its moment too, as it must at any conference in 2026. The use case that resonated most was a practical one: AI helping GPs understand, quickly, what their existing facility documentation actually permits when something time-sensitive lands on the desk months after signing. Less sci-fi, more useful, which is probably exactly the right place for it.
With the heat outside showing no signs of letting up, the panel closed on an optimistic note. The mid-market is, by some distance, where the most interesting problem-solving in fund finance is happening right now; more open conversations, more creative structures, and more lenders genuinely willing to do the work. Malcolm, it turns out, is doing just fine.
