Nodem Completes $22m NAV Facility for a Growth Equity Fund to Accelerate DPI
A growth equity GP used a NAV facility to accelerate distributions ahead of a successor fund raise, demonstrating DPI to LPs without forcing premature exits of high-performing portfolio companies.
Transaction Overview
Nodem Capital completed a $22m NAV facility for a growth equity fund nearing the end of its investment period. The fund holds a concentrated portfolio of six direct investments in B2B software and fintech companies, several of which are on strong growth trajectories but are 12 to 18 months from optimal exit timing.
The GP is preparing to raise a successor fund and needed to demonstrate tangible DPI to its LP base. Forcing premature exits would have sacrificed significant upside. The NAV facility allowed the GP to make a distribution to LPs funded by the facility, with repayment structured against the anticipated exits of two portfolio companies expected to close within 18 months.
Why This Structure
Successor fund raises increasingly require demonstrable DPI. LPs want to see cash returned before committing to a new fund. But in a slow exit environment, GPs face a tension between showing DPI and maximising portfolio value. A NAV facility resolves this: it provides the distribution LPs want while giving portfolio companies the time they need to reach full value. When structured with ILPA guidance in mind and clear disclosure to LPs, it is a transparent tool for managing this timing mismatch.
Facility Details
Facility size: $22m
Borrower: Growth equity fund
Collateral: 6 direct investments in B2B software and fintech
LTV: Below 20%
Interest: PIK
Duration: 18 months
Use of proceeds: Accelerating DPI ahead of successor fund raise
Repayment: Cash-flow sweep from two anticipated portfolio exits
About Nodem Capital
Nodem Capital is a specialist NAV lender providing portfolio-backed credit facilities, typically $10m to $100m and above, to family offices, GPs, and private funds. Nodem is authorised and regulated by the Financial Conduct Authority. For enquiries, contact abranton@nodem.com or visit nodem.com.
For definitions of the terms used in this case study, see the NAV lending glossary.