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Fund finance represents a range of facility structures to private capital funds. Most common structures include subscription credit or “capital call” facilities, but the fund finance market is quickly evolving towards a suite of innovative solutions to help private funds achieve their strategic objectives. ���������ֳ� has more than 20 years of experience providing ratings in the private funds space and offers a wide range of rating products to meet our clients' needs.

���������ֳ� has published new rating criteria for Net Asset Value (NAV) Finance. The criteria outline ���������ֳ�’s methodology for rating obligations backed by the net asset value (NAV) and cash flow of funds or other entities that primarily invest in limited partnership interests of alternative investment funds. These obligations are often referred to as NAV loans to secondaries funds.

Key considerations:

• NAV loan ratings are anchored by ���������ֳ�’s cash flow modelling, which maps to a quantitative rating indication (QRI).
• Qualitative factors contribute to an overall qualitative assessment (QA) that can result in notching from the QRI, with the rating subject to a rating cap.
• Key rating drivers include the asset quality of the portfolio, additional sources of repayment and liquidity available, an assessment of the fund and manager, and the loan structure.

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���������ֳ� also has rating criteria for subscription facilities backed by capital commitments to private capital funds.

Key considerations:

• Quantitative analysis of subscription facilities is based on the credit quality and diversification of the LP pool, and modelled losses compared to the level of over-collateralization available to the facility
• Qualitative assessment considers the fund manager, the fund’s characteristics, and the facility’s structural terms
• ���������ֳ� may also cap subscription facility ratings in certain circumstances
• Rating framework applies globally to new ratings and their surveillance

Find out more with the following resources:

���������ֳ�' criteria addresses obligations backed by portfolios of interests in private equity and other alternative investment funds. These obligations can take the form of loans, preferred equity or securitizations, and are typically referred to as private equity collateralized fund obligations (PE CFOs).

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The following rating action commentaries are public ratings for subscription finance facilities rated by ���������ֳ�:

• ���������ֳ� Rates ACF IX Subscription Facility (Barclays and UniCredit Participations) 'AA'/Stable

• ���������ֳ� Rates CVC Credit Partners European Direct Lending Fund III's SFFs 'A'; Outlook Stable

• ���������ֳ� Rates FAPI IV Subscription Facility (Barclays Bank Ireland PLC Participation) 'AA+'/Stable

• ���������ֳ� Rates Rivean Capital Fund VII Cooperatief U.A.'s Subscription Facility

• ���������ֳ� Rates AlpInvest Co-Investment Fund VIII's Umbrella Subscription Facility

• ���������ֳ� Rates Investindustrial VIII SCSp's Subscription Facility

• ���������ֳ� Rates ASF VII Primary C.V.'s Umbrella Subscription Facility 'AA+'/Stable (ABN Amro Participation)

• ���������ֳ� Rates AXA IM InMotion RCF Fund II Subscription Facility

• ���������ֳ� Rates CVC Capital Partners IX Subscription Facility Obligations 'AA+'/Stable

• ���������ֳ� Affirms Oakley Capital V Master SCSP's 2023 Subscription Facility at 'AA'

• ���������ֳ� Rates AlpInvest Secondaries Fund VIII Subscription Facility 'AA'/Stable

• ���������ֳ� Rates Inflexion Buyout Fund VI's Subscription Facility 'AA+'/Stable

• ���������ֳ� Rates Henderson Park Real Estate Fund II SCSp's Subscription Facility 'A'/Stable

• ���������ֳ� Rates 17Capital Credit Fund EUR SCSp (Barclays Bank Ireland plc Participation) 'AA+'/Stable

• ���������ֳ� Assigns Rating to Brookfield Global Transition Fund Subscription Facility

• ���������ֳ� Assigns Rating to Oakley Capital V Subscription Facility