NAV Financing Update: Mid-Year 2026

Nodem Capital is a NAV lender providing portfolio-backed credit facilities, typically $20m to $100m+, to GPs, family offices and private funds. We sit deliberately apart from bank facilities and from the largest buyout-focused NAV lending platforms: our market is the portfolios that fall outside both. If a portfolio is too complex for a bank and too small for the platforms, it is a Nodem deal. We lend institutional capital, so certainty of funds sits behind every term sheet we issue. This update covers what we saw in the first half of 2026, where pricing sits, and the situations in which a facility is proving most useful.

All data in this update is proprietary, drawn from Nodem’s own live origination pipeline, and is published here for the first time.

What We Saw in H1 2026

Our origination N for 2026 now stands at 100+ viable transactions, with enquiry volume up 52% year-on-year versus H1 2025. The pattern in what progresses is consistent. On the NAV lending side, we favour larger, diversified, cross-asset-class collateral with multiple paths out of a trade. On the special situations (preferred equity) side, we look for strong investors with a clear opportunity and a temporary liquidity mismatch, collateralised by companies we know well or can underwrite, anchored to live market pricing wherever possible.

Enquiries by Use Case

• Portfolio-backed acquisition financing: 85%

• GP / personal financing: 6%

• Refinancing existing debt: 5%

• Other (tax planning, creative structures): 4%

Within acquisition financing, proceeds are being deployed as follows:

• Secondary purchases (stakes in funds or companies already known): 20%

• New direct investments: 66%

• Fund commitments / capital call funding: 14%

Enquiries by Investor Type

• Single-Family Offices: 65% of enquiries (+15% vs H1 2025)

• General Partners (GPs): 20% of enquiries (-5% vs H1 2025)

• UHNWIs: 10% of enquiries (+4% vs H1 2025)

• Multi-Family Offices: 5% of enquiries (-29% vs H1 2025)

Some 83% of enquiries this half came from investors that had never previously used fund-level or portfolio-backed leverage. NAV financing is broadening well beyond its early adopters.

Screening and Conversion

We publish our funnel because it says more about discipline than any description of criteria could. Of enquiries received in H1 2026:

• Passed initial screen: 20%

• Progressed to term sheet: 8%

The requests we decline at the initial screen are typically too small or too concentrated. Ranked by frequency, the top three decline reasons were:

• Facility size too small: 40% of declines

• Concentration in minority direct positions that would be hard to unwind: 35% of declines

• Weak or stale valuation anchor: 25% of declines

That narrowness is deliberate: we would rather be the first call for one kind of facility than the fifth call for every kind.

Why a NAV Facility, and Why Now

The exit environment remains slow. Bain’s Private Equity Midyear Report 2026 puts the industry’s implied capital cycle at roughly seven years, with distributions as a percentage of NAV coming off a four-year stretch of record lows. The important point for portfolio owners is that this is a timing problem, not a value problem: MSCI data shows more than 75% of buyout assets still exit above their next-to-last quarterly mark. Value is there; it is simply arriving later than planned.

There are constructive signals alongside. Dry powder remains ample, debt markets are open, and select assets continue to clear at strong prices. The secondaries market is developing quickly: 2025 was a record year, with total volume of roughly $225–240bn, up more than 40% year on year across both LP-led and GP-led transactions. The liquidity toolkit available to portfolio owners is broader than it has ever been.

A NAV facility sits alongside these routes with one distinction: it raises capital without selling assets and without crystallising a secondary discount. The portfolio remains intact, the upside remains yours, and the facility is repaid from the distributions and exits already expected. Facilities are typically sized at 10-30% LTV against a diversified pool, with cash-flow sweeps so that natural portfolio cash flows service the debt first.

Where Pricing Sits

Indicative non-bank pricing in the current market, based on our own pipeline:

• Highly diversified, large LP stakes: from approximately 400bps over reference rates.

• Most direct portfolios: between 500bps and 750bps over a reference rate.

Current pricing spans a wide spectrum, and the headline that “NAV spreads are compressing” is only half-true.

The genuine NAV range runs from roughly 175bps to 1,200bps over base. Large, diversified buyout portfolios, the kind that banks, insurers and rated lenders compete hardest for, clear at 175–350bps, while concentrated or thinly traded collateral commands 500–1,200bps. Subscription lines at 125–225bps are a separate instrument, not the floor of this market.

What we have seen in 2026 matches recent lender surveys that put the bulk of NAV margins in a 4–7% band, with weighted-average targets near 520bps for secured facilities and 660bps for recourse-light structures. That gap of roughly 140bps is narrower than the flexibility difference suggests, which is why recourse-light structures are gaining share. Pricing has drifted tighter: survey margins fell around 40bps in the year to May 2026, and one index of mid-market buyout NAV loans eased from an average of 685bps in late 2023 to about 590bps a year later. Leverage remains conservative. The same index shows average LTVs near 14%, with the large majority at or below 20%, though opening LTVs are creeping up from the historical 15–20% range as competition intensifies. Compression is concentrated at the bank-led large-cap end; in the $20m–$100m mid-market, where competition is thinnest, pricing discipline still holds.

Structure preferences are also shifting: 90% of borrowers in H1 2026 elected PIK interest against 10% choosing cash pay. Facilities are being used to preserve, rather than consume, portfolio cash flow while exits complete.

The main pricing drivers are diversification, opening LTV, the strength of the valuation anchor, and structure (cash pay versus PIK, sweep mechanics, duration).

A note on banks. They anchor the tightest pricing at the large-cap end of the market, but in practice they struggle with 95%+ of the portfolios we transact against: the collateral is not the shape their credit processes are built for, and they are far less flexible on structure and timeline. We wrote this quarter on exactly why: Why a Bank Will Not Lend Against Your Private Equity Book. Nodem exists for that other 95%: the underwriting-intensive portfolios that sit between bank appetite and the mega-platforms’ minimum ticket. We do not try to out-bank the banks on price; we lend where they cannot follow.

Deal Data: Sizes, LTVs and Timelines

Medians from our H1 2026 pipeline:

• Median facility size: $25m

• Median opening LTV: 21%

• Median number of underlying positions in collateral pool: 18

Collateral pools were a healthy mix of buyout, venture and growth, real assets and real estate, and other private strategies.

What a Nodem Facility Typically Looks Like

• Facility size: $20m to $100m+

• Loan-to-value: Up to 30%; higher considered for real estate and highly diversified LP books

• Pricing: From ~400bps over reference rates (large, diversified LP stakes); 500–750bps for most direct portfolios

• Interest: Cash pay or PIK; PIK removes any cash servicing burden while exits complete

• Duration: Typically 1–4 years, extendable, sized to the portfolio’s expected distributions

• Repayment: Cash-flow sweep from distributions and exits; early repayment accommodated

• Draws: One or two draws agreed upfront, not a revolving facility; undrawn amounts attract a lower fee

• Timing: Term sheet typically within two weeks of receiving good-quality data; funding around a month after that

• Security: Distribution accounts and equity pledges over holding vehicles; recourse-light structures available where transfer restrictions apply

• Governance: No involvement in the day-to-day management of the portfolio or its assets

One point of difference from bank lenders: we do not offer revolving credit facilities. We invest out of a fund structure rather than a bank balance sheet, so capital is called and committed to a specific deal rather than held against fluctuating utilisation. Facilities are therefore structured as one or two draws agreed upfront, with a lower fee on the undrawn amount, which keeps the cost of unused capacity down without the pricing a revolver would require.

Could Your Portfolio Qualify?

If you have a need for a facility of $20m to $50m+ secured within 30% LTV (higher is possible for real estate or highly diversified LP books), get in touch. A review is confidential and deliberately light on your team. We need four things:

• Portfolio composition (asset list or fund positions, with sector and vintage)

• Current NAVs and valuation dates

• The expected timeline of distributions or exits

• Facility size and intended use of proceeds

From there, we give initial feedback within days. Where there is a fit, we typically issue a term sheet within two weeks, subject to the quality of the data provided, and funding follows around a month after the term sheet. Underwriting uses an independent valuation agent and does not disrupt your portfolio companies or your LPs. There is no cost or obligation attached to a review.

Please reach out through the website or directly via abranton@nodem.com to arrange a portfolio review.

Best regards,

Alex Branton
Founder and Chief Investment Officer
Nodem Capital