Wealthy Investors Increased Borrowing Against Private Equity
Investors are using net asset value loans to access cash without selling holdings during a downturn in dealmaking.
Updated on Sept. 28, 2026 in Investing
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Wealthy individuals and family offices have increasingly turned to net asset value (NAV) lending as a way to access liquidity. This shift allows investors to realize cash without selling their stakes in private equity funds while capital remains locked.
Why it matters
A four-year downturn in private equity dealmaking has squeezed cash payouts from buyout funds, forcing investors to seek alternative ways to access liquidity. These loans provide a bridge for those who need cash but prefer to maintain their positions in private assets.
The NAV lending market has reached a total of $150 billion, with the average deal size totaling $150 million. Banks typically lend 25 to 35 percent of asset value for these loans, compared to 40 to 60 percent for art loans.
The players
Family offices
Private wealth management firms that handle investments and financial planning for high-net-worth households.
Banks
Financial institutions that manage credit risks and provide lending products against various asset classes.
The details
Investors borrow against the value of their existing holdings to generate immediate cash flow. This mechanism acts as an alternative to secondary market sales, which may not be feasible or desirable. Terms typically last two to three years, providing investors with a window to manage their financial needs until dealmaking activity potentially rebounds.
Timeline
Family office allocations to private assets rose from 16 percent in 2019 to 20 percent in 2025.
Buyout funds returned less cash than in the previous decade between 2015 and 2025.
Common NAV loan terms currently extend for two to three years.
Money Landscape
The rise of NAV lending reflects a broader liquidity crunch within private markets following a decade of suppressed cash returns. This trend suggests investors are becoming more creative in how they manage cash flow while their capital remains tied up in long-term, illiquid holdings.
Investors heavily concentrated in private equity should review their overall liquidity needs and the duration of their fund commitments. Before exploring alternative lending options against assets, it is essential to discuss the risks and loan-to-value implications with a qualified professional.
The takeaway
The growth of NAV lending highlights a shift toward leveraging private assets to bypass limited cash distributions from locked-in funds. Monitor your fund's distribution schedules and consult with a tax or financial advisor to understand how loan-based liquidity impacts your total leverage.
Further reading
For more on managing long-term portfolio liquidity, see our Investing section.
Source note: This article includes information reported by Financial Times News.
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