Nodem Completes $50m Preferred Equity Facility for a Multi-Asset Holding Company
Replacing an expensive cash-pay bank facility with a PIK-based preferred equity structure eliminated a $3m annual cash drain and freed capital for new investments.
Transaction Overview
Nodem Capital completed a $50m preferred equity facility to a holding company controlled by a family office. The borrower manages a mixed portfolio of private equity fund interests, direct co-investments, private credit allocations, and a small allocation to venture capital.
The family had an existing bank facility with a fixed cash interest rate of approximately 6.5%, creating an annual cash servicing burden exceeding $3m. This cash was being sourced by liquidating portfolio positions the family would have preferred to hold. Nodem’s PIK-based preferred equity structure replaced the bank facility entirely, eliminating the cash drain while maintaining portfolio integrity.
Why This Structure
Bank facilities impose cash-pay interest that creates a fundamental mismatch with illiquid portfolios. The underlying assets may not generate distributable cash for years, yet the loan demands monthly or quarterly payments. A PIK structure resolves this by capitalising interest over the facility’s term, with repayment triggered by actual liquidity events. The family office preserved over $3m per year in cash that is now being redeployed into new primary commitments.
Facility Details
Facility size: $50m
Borrower: Multi-asset holding company (family office controlled)
Collateral: PE funds, co-investments, private credit, venture capital
LTV: Below 25%
Structure: Preferred equity with PIK return
Duration: 4 years, extendable
Use of proceeds: Refinancing existing bank facility; cash preservation
Annual cash saving: $3m+ (eliminated cash-pay interest)
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.