{"text":[[{"start":9.374,"text":"Wealthy individuals have started borrowing against their private equity holdings to help offset a four-year dealmaking downturn that has squeezed payouts from buyout funds."}],[{"start":20.244,"text":"Net asset value (NAV) lending had previously been used by institutions seeking to leverage their private equity and private credit holdings, but is increasingly being adopted by rich people and the family offices that manage their wealth."}],[{"start":33.84,"text":"Buyout funds, the private capital industry’s largest asset class, have for the past four years returned far less cash to their backers than in the previous decade as a result of sluggish dealmaking."}],[{"start":45.718,"text":"That has left backers of those funds, including large pension funds, buyout executives and increasingly individuals, seeking other sources of liquidity while their investment remains locked up."}],[{"start":56.289,"text":"Ben Williams, head of Emea and Asia private banking, lending and deposits at Goldman Sachs, said clients were “less tolerant” of these assets “not deriving more value for them”."}],[{"start":66.8,"text":"Family offices allocated 20 per cent of their assets to private equity and private debt in 2025, according to a report by UBS — up from 16 per cent in 2019."}],[{"start":79.68,"text":"“You want to have at least the opportunity to sweat as many of your assets as you can in a risk-efficient way,” Williams added. “And it’s inefficient to have an asset that you can’t sweat.”"}],[{"start":89.74,"text":"NAV loans are an alternative to selling stakes in the secondary market, where deals are usually struck at a discount. By borrowing against the value of their holdings, investors can realise cash without crystallising a loss and then deploy that capital into other investments."}],[{"start":104.295,"text":"The total market for NAV lending is around $150bn, according to research by Fund Finance Partners, with an average deal size of about $150mn."}],[{"start":114.32,"text":"Its use by individuals was still in its early stages, said Scott Rosen of private credit group Ares. But he added that NAV financing was increasingly acting as “another source of liquidity”."}],[{"start":131.723,"text":"Ten years ago, “the term ‘NAV lending’ [for individuals] didn’t exist, it was a one-off unique transaction”, said Dupe Adeyemo, of asset manager AllianceBernstein."}],[{"start":138.56,"text":"In recent years, however, “the market has institutionalised”, he said, so that NAV lending to individuals has become a recognised category of its own."}],[{"start":150.56,"text":"Goldman’s Williams said that NAV lending did present challenges for banks because of the underlying assets’ illiquidity. “This is at the top end of the difficulty scale,” he said."}],[{"start":158.653,"text":"The bank will generally lend between 25 and 35 per cent of the assets’ value for NAV loans, Williams said — well below the 40 to 60 per cent loan-to-value that banks typically offer for art loans, another class of illiquid assets the rich borrow against. Loan terms tend to be two to three years and are commonly renewed."}],[{"start":184.32,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790581633_9586.mp3"}