Fund finance has, until recently, occupied the quiet margins of private markets. That is no longer the case. The observations below were presented at the TACT Loan Capital and Capital Markets Conference 2025 in London, where the discussion returned repeatedly to a single conclusion: the instruments that finance funds themselves have become central to how private capital operates — and they are about to be tested.
Three points are worth drawing out.
The first is scale. Fund finance is now a market of some $1.2 trillion, and is on a trajectory toward $2.5 trillion by 2030. It is no longer a niche product sitting alongside the main event; it is part of the infrastructure of private markets, and should be understood as such by anyone arranging or advising on it.
The second is NAV financing. NAV loans have grown to roughly $100 billion today, with projections approaching $145 billion by 2030. The growth is rational — these facilities answer a genuine liquidity need in a market where exits have slowed. But the segment has not yet been tested through a default. The first will be instructive, and not only for the borrower: it will test sponsors, lenders and trustees simultaneously, and it will reveal how robust the documentation of a young market really is once a structure is placed under genuine pressure.
The third is the changing role of the trustee. In the bespoke, hybrid transactions that now characterise much of fund finance, trustees are moving from a passive administrative function toward something closer to the proactive role long familiar in the bond market. That shift has consequences for how these transactions are structured and negotiated from the outset — consequences that are not yet fully reflected in how many participants approach them.
Taken together, these developments point to a market maturing faster than its conventions. Fund finance has acquired the scale of an established asset class without yet having lived through a full cycle. The discipline that will distinguish the participants who navigate the next phase well is the one that has always mattered in private credit: understanding the structure before it is tested, rather than after.
Laetitia Costa, Founder
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