Welcome to Insights, where we delve into the evolving legal landscape of private investment funds, offering practical guidance to help fund managers and investors navigate today’s complex environment. Insights serves as a valuable resource for exploring current industry trends, key regulatory updates, and practical tools, designed to address the unique challenges faced by stakeholders in the private investment funds sector. Some of our posts will provide introductory insights, while others will delve into complex emerging legal issues.
Explore our posts for insights into critical topics such as fund marketing rules, fund governance, and liquidity management—all curated to empower your decision-making.
Disclaimer: The content provided here is for informational purposes only and does not constitute legal or tax advice. Readers should consult with a qualified legal or tax advisor to address specific legal concerns or questions.
NAV Loans and Fiduciary Duties
Net Asset Value (NAV) loans have become an increasingly popular liquidity solution for private equity funds. These loans, secured against the residual value of a fund’s portfolio, provide flexibility for general partners (GPs) to manage cash flows, make follow-on investments or return capital to investors. However, the fiduciary duties of a GP in the context of NAV loans present a nuanced legal landscape—particularly regarding whether and how these duties can be waived.