By Ross Dow, Director, Debt Finance, OakNorth

In September, I was at the FFA Global Leadership Summit in Portugal, one of the most senior gatherings in the fund finance calendar. Unlike Miami, where the sheer scale of the event means you spend a lot of your time navigating the conference floor, Portugal is different. The room is smaller, the conversations are more candid, and you actually get around everyone. 

Here’s what stood out to me, from a lender’s perspective. 

NAV has graduated. The market just needs to catch up. 

You’ve likely heard this before, and Portugal was no different. The broad consensus at the summit, echoed across virtually every panel and conversation, was that NAV lending is no longer a developing product. It is mainstream. Funds are integrating NAV facilities into their liquidity management as a matter of course, not as a last resort. 

What’s more interesting from where we sit is that the conversation has shifted from whether to use NAV to when and how. The lifecycle logic is becoming well understood: subscription lines at the start of a fund’s life, a hybrid facility through the investment period, NAV as the portfolio matures and unfunded commitments dry up. For lenders who have built genuine capability across all three, rather than just talking about it, this is a meaningful opportunity. 

What the summit also surfaced is that a meaningful number of banks will say they do NAV lending, but won’t actually move when it comes to it. That gap between stated appetite and real execution matters to borrowers. 

The ratings question is back on the table 

One of the more technical but consequential themes from the summit was the growing relevance of rated facilities, and it connects directly to Basel 3.1. 

The short version: under current UK rules and standardised model, lenders are required to hold capital equal to 100% of the risk weighted assets (RWAs) of an unrated fund finance transaction.  If a facility is externally rated and qualifies for a lower risk weighting, that requirement can materially drop depending on the rating. That’s a significant release of RWAs, and it changes the economics of lending materially. 

For years, ratings in this market were largely irrelevant to UK lenders. That’s changing. As Basel 3.1 filters through, more banks are going to be asking about ratings on new transactions. Borrowers who haven’t thought about this yet probably should. 

The security stacking question nobody has had to answer yet 

One of the more honest conversations at the summit was around enforcement: specifically, what actually happens when you have multiple layers of secured debt across a fund structure and things go wrong. 

As NAV lending has grown, it’s increasingly common to have asset-level financing sitting inside the same structure as a fund-level NAV facility. Both lenders may hold senior or super-senior security, but over different entities, and ultimately over the same underlying assets. In a stress scenario, the interaction between those positions is untested. There have been very few real enforcement events to learn from. 

The practical takeaway isn’t that NAV is risky. It’s that lenders and their borrowers should be having the enforcement conversation at the outset, not when it becomes urgent. Having a clear view of how security would be enforced, and making sure your legal framework supports that view, is increasingly part of good underwriting hygiene. 

Fundraising is hard, but the right funds are finding capital 

The broader fundraising environment was a recurring theme. The consensus: difficult conditions persist, but funds with strong DPI and a clear track record are finding genuine investor appetite. 

What’s notable for lenders is that this bifurcation is shaping the market at every level. LPs are more discerning. GPs are having to work harder on transparency and communication. And for us, the quality of the underlying investor base and the GP’s track record across previous vintages has become an even more important part of how we assess a deal. 

The growth of separately managed accounts was another thread that came up in multiple conversations. LPs are increasingly seeking tailored exposure rather than standard commingled structures, and that has ripple effects on how fund finance facilities are structured. 

In an uncertain world, prepare for everything 

Geopolitics featured more prominently at this year’s summit than in previous years, and the takeaway was a practical one: in the absence of being able to predict outcomes, the best course of action is to prepare for all eventualities. Nobody in the room claimed to know where trade policy, interest rates or the broader macro environment is heading. The honest consensus was that the range of plausible outcomes remains unusually wide. 

For funds, that uncertainty has real implications for how they structure financing. Facilities that offer flexibility, that don’t lock borrowers into rigid terms when the landscape is shifting, become more valuable. Lenders who can move quickly, underwrite on fundamentals rather than market sentiment, and hold through volatility are the ones funds want relationships with when conditions get difficult. 

That’s a description of how we try to operate here at OakNorth. We’re not a large syndicated lender managing committee processes across multiple geographies. We make decisions quickly, we underwrite each deal on its own merits, and we’re structured to stay close to our borrowers through the cycle. In a world where nobody quite knows what comes next, that kind of lender becomes more useful.