NAV Facility Governance: What GPs Get Wrong

Where NAV Deals Actually Break Down

Most GPs preparing for a NAV facility focus their energy on the credit process, the underwriting, the pricing negotiation, the term sheet. In practice, the deals that collapse rarely fail at that stage. The constraint is governance, not capital.

In a new article for Not Very Private Equity, Alex Branton explains why the LPAC conversation is the one that determines whether a NAV facility closes, and why GPs who treat it as a formality are the ones who lose the deal.

The ILPA Guidelines Have Changed the Baseline

The ILPA guidelines published in July 2024 reset expectations for NAV facility governance. Where fund documents are silent on NAV financing, the expectation is now that GPs seek LPAC consent before drawing, with full disclosure of rationale, use of proceeds, size, structure and key terms. This applies even when the documents technically permit a facility, particularly where proceeds are used for distributions.

The article covers how these guidelines are shaping live deals in 2026, what disclosure LPs now expect, and why running the LP conversation before the credit conversation removes the most common reason NAV facilities fail.

What the Article Covers

The full piece walks through the mistakes GPs make in roughly the order they cost money. These include misreading who actually has the deciding vote on a facility, underestimating how lenders assess portfolio marks versus stated NAV, misjudging current pricing (which has compressed materially since 2022), and treating the lender relationship as adversarial rather than structural.

It also sets out what a well built NAV facility looks like from the lender's side, including how LTV discipline, cure periods and repayment triggers should be structured from the outset.

Read the Full Article

The full article is available on Not Very Private Equity: GPs think NAV deals die in credit committee. They die at the LPAC.

For a confidential discussion about how a NAV facility could work for your portfolio, contact Alex Branton at abranton@nodem.com or visit nodem.com/contact.