Our first event dedicated to fund finance brought together banks, fund managers, institutional investors and law firms from across Europe. Over a day of panels and workshops, three themes ran through the discussion: innovation, collaboration and education.
Innovation: beyond the subscription line
Subscription lines remain the foundation of the fund finance market, but much of the energy in the room was focused on what sits alongside them. NAV facilities, secured on a fund's underlying portfolio rather than investor commitments, are being used across a wider range of strategies and at different stages of a fund's life. Hybrid facilities, combining elements of both, are giving funds more flexibility as they move from deploying capital to managing and realising their portfolios.
Panellists also discussed GP-level and management company financing, continuation vehicle financing and the growing use of sustainability-linked features in fund finance facilities.
Collaboration: a broader lender base
A recurring theme was the arrival of new sources of capital. Insurers, pension funds and private credit managers are increasingly participating in fund finance, either directly or through rated and tranched structures. Speakers agreed that this brings welcome capacity, but also requires banks, investors and borrowers to align on documentation, operational processes and how lender groups make decisions.
As the lender base broadens, a shared understanding of structures and terms becomes more important, not less.
Education: building market understanding
Fund finance has historically been a specialist, relationship-driven market. As it grows and attracts new participants, panellists stressed the importance of education, both for new lenders getting to grips with fund structures and for fund managers and their investors seeking to understand how different facilities work and what they mean for limited partners.
Transparency towards investors was a particular focus. Several speakers noted that clear communication about the purpose, cost and risks of fund-level leverage helps build trust and supports the long-term health of the market.
Looking ahead
The overall tone was optimistic. Participants expect European fund finance to keep growing, supported by continued fundraising across private markets, wider use of NAV and hybrid facilities, and new lenders. The challenge will be to grow in a way that keeps documentation consistent, risks well understood and the market resilient through the cycle.
What's next from the LMA
- Continued development of our fund finance documentation, informed by feedback from this event.
- New training on fund finance structures as part of our learning and development programme.
- Further fund finance events and webinars through the year.
Thank you to all of our speakers, sponsors and attendees. Members can watch recordings of selected sessions in our podcasts and videos section.
