NAV-Based Bonds: The Secret Sauce of Fund Financing

What is a NAV-Based Bond?

Imagine you’re a private equity fund with a treasure chest full of assets but no spare cash for new investments. Selling assets? That’s a bit of a faff. Enter NAV-based bonds - a nifty way to raise capital using your portfolio’s Net Asset Value (NAV) as security. Unlike your run-of-the-mill corporate bond, these are secured against the fund’s total NAV, meaning lenders are essentially betting on the overall value of your assets, rather than individual properties or companies.