Nodem Completes €40m NAV Facility for a German Family Office
A euro-denominated NAV facility provided a German family office with tax-efficient liquidity, avoiding the realisation of embedded capital gains by borrowing against the portfolio rather than selling.
Transaction Overview
Nodem Capital completed a €40m NAV facility for a German single-family office. The borrower holds a portfolio of European private equity fund interests and direct investments, structured through a Luxembourg holding vehicle. The portfolio has significant embedded capital gains, and any asset sales would trigger substantial tax liabilities under German tax law.
The family required liquidity for a combination of new fund commitments, a property acquisition, and personal capital needs. The NAV facility provided this capital without requiring any asset sales, preserving both the portfolio positions and the tax-deferred status of unrealised gains.
Why This Structure
For German family offices, selling private equity positions crystallises capital gains that can attract rates of more than 25% inclusive of solidarity surcharge. Borrowing against the portfolio rather than selling it avoids this entirely. The PIK structure means no cash interest deductions need to be managed during the facility term, simplifying the tax position further.
Facility Details
Facility size: €40m
Borrower: German single-family office (via Luxembourg holding)
Collateral: European PE fund interests and direct investments
LTV: Below 25%
Interest: PIK
Currency: Euro-denominated
Duration: 3 years
Use of proceeds: New fund commitments, property acquisition, personal liquidity
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.