Construct a subscription line borrowing base from eligible limited partner commitments and advance rates.
Finance & Banking
Fund Finance with Subscription Lines and NAV Facilities
Understand subscription line and NAV facility structures used in private equity fund finance, from borrowing base mechanics and LPA due diligence to IRR impact, covenants and ESG-linked pricing.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
Private equity funds increasingly rely on borrowed capital, not just commitments, to manage liquidity and returns, and two products dominate that market: subscription line facilities secured against uncalled limited partner commitments, and NAV facilities secured against the value of the underlying portfolio. This course explains how both products work and where they diverge in structure, risk and investor sensitivity. Participants build a borrowing base from eligible investor commitments, review limited partnership agreement clauses that determine a lender's step-in rights, and set concentration limits and default triggers specific to fund finance. On the NAV side, sessions cover look-through to portfolio company valuations, loan-to-value covenants and stress testing headroom under a downturn scenario. Because subscription lines affect reported IRR, the course also works through ILPA disclosure guidance and how to communicate facility usage transparently to limited partners. The final module covers umbrella facilities spanning multiple funds, financing structures behind GP-led secondaries and continuation funds, and ESG-linked pricing terms now appearing in fund finance documentation, leaving participants able to structure, negotiate and monitor a facility appropriate to a fund's stage.
Expected Learning Outcomes
Review limited partnership agreement provisions that determine lender step-in and direct call rights.
Structure NAV facility covenants, including loan-to-value thresholds, appropriate to a fund's lifecycle stage.
Assess the impact of subscription line borrowing on reported IRR and apply ILPA disclosure guidance.
Stress test NAV facility headroom against portfolio company valuation and concentration risk.
Structure umbrella facilities and financing appropriate to GP-led secondaries and continuation fund transactions.
Negotiate fund finance pricing, including ESG-linked terms, with lenders and fund counsel.
Who Should Attend
Fund finance and leveraged finance bankers structuring subscription line and NAV facilities.
Private equity CFOs and finance directors managing fund-level financing.
Fund counsel reviewing limited partnership agreements for lender due diligence.
Limited partner investor relations teams responding to questions on facility usage and IRR.
Credit and risk analysts assessing fund finance facility structures and covenants.
Secondaries and continuation fund professionals arranging transaction-related financing.
Course Modules
Select any module to see its sessions and points.
01Fund Finance Market and Product Landscape
2 sessions · 8 points
Session 1Subscription Line Mechanics and Borrowing Base Construction
- Explain the mechanics of a subscription line facility secured against uncalled limited partner capital commitments.
- Construct a borrowing base that determines available facility capacity from eligible investor commitments.
- Apply advance rates that vary by limited partner credit quality and jurisdiction within the borrowing base.
- Model a capital call drawdown and facility repayment cycle across a fund's investment period.
Session 2NAV Facilities and Hybrid Structures
- Distinguish NAV facilities secured against portfolio company value from subscription lines secured against commitments.
- Structure hybrid facilities that combine uncalled capital and NAV as borrowing base collateral over a fund's life.
- Compare loan-to-value covenant thresholds typically applied to NAV facilities at different points in a fund's life.
- Assess which facility type suits a fund at the investment, harvest or wind-down stage of its lifecycle.
02Legal and Structuring Considerations
2 sessions · 8 points
Session 1LPA Review and Lender Due Diligence on Investor Base
- Review limited partnership agreement provisions that determine a lender's ability to call defaulting or non-paying investors.
- Conduct lender due diligence on the investor base, assessing concentration, jurisdiction and credit quality.
- Assess transfer and assignment provisions in the LPA that affect lender step-in rights on default.
- Identify side letter terms that could restrict a lender's recourse to specific limited partners.
Session 2Covenants, Concentration Limits and Events of Default
- Set investor concentration limits that prevent a subscription line from relying too heavily on a small number of limited partners.
- Draft borrowing base covenants that require periodic recertification of eligible investor commitments.
- Define events of default specific to fund finance, including LPA amendments and key person triggers.
- Structure step-in and direct lender notice rights that let a lender call capital directly from investors on default.
03Fund Economics and Investor Considerations
2 sessions · 8 points
Session 1IRR Impact, ILPA Guidance and LP Communication
- Assess how subscription line borrowing affects reported IRR by delaying the timing of called capital.
- Apply ILPA guidance on subscription line disclosure, including gross and net IRR reporting to limited partners.
- Prepare LP communication materials that explain facility usage, cost and its effect on reported returns.
- Compare fund-level return metrics calculated with and without subscription line leverage.
Session 2NAV Facility Look-Through and Portfolio Company Risk
- Model a NAV facility's look-through to underlying portfolio company valuations and concentration risk.
- Assess valuation methodology and reporting frequency requirements that support NAV facility covenant compliance.
- Stress test portfolio company valuations to evaluate NAV facility headroom under a market downturn scenario.
- Evaluate the impact of a portfolio company default on NAV facility covenant compliance and lender remedies.
04Structuring, Pricing and Emerging Practice
2 sessions · 8 points
Session 1Umbrella Facilities, GP-Led Secondaries and Continuation Fund Financing
- Structure umbrella facilities that provide shared capacity across multiple funds managed by one sponsor.
- Assess financing structures used to support GP-led secondaries and continuation fund transactions.
- Evaluate cross-collateralisation risk when multiple funds share a single umbrella facility structure.
- Design allocation mechanics that fairly apportion umbrella facility usage and cost across participating funds.
Session 2Pricing, ESG-Linked Terms and Lender Relationship Management
- Benchmark subscription line and NAV facility pricing, including margin, commitment fee and utilisation fee structures.
- Structure ESG-linked pricing terms that adjust facility margin against fund-level sustainability performance targets.
- Negotiate facility terms with fund finance lenders, balancing flexibility against covenant and cost trade-offs.
- Build a lender relationship management approach for funds using multiple facilities across their lifecycle.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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