Buchalter’s Fund Finance Group is a market-leading practice that advises investment funds, fund sponsors, and lenders across the full spectrum of fund-level financing solutions. We regularly structure and negotiate subscription lines of credit, net asset value (NAV) loans, “hybrid” facilities, management company lines of credit, and other bespoke financings for fund-related entities.
We bring together a multidisciplinary team of debt finance, fund formation, ERISA, tax, licensing, and regulatory attorneys to deliver integrated, market-driven advice. We represent both lenders and borrowers in bilateral and syndicated fund financings for debt and equity funds, including Small Business Investment Company (SBIC) funds.
Subscription Lines of Credit
We represent lenders and investment funds in connection with revolving credit facilities secured by a fund’s uncalled capital commitments. These facilities bridge the timing gap between a fund’s investment or operating needs and the receipt of capital contributions from investors.
Drawing on our own experience and a global network of foreign counsel, we handle subscription facilities for domestic and offshore funds and alternative investment vehicles across jurisdictions. Our work also includes management company lines of credit, loans to general partners and investment advisers, and co-investment financings.
Net Asset Value (NAV) Loans
For later-stage funds with established portfolios, we represent lenders and funds on NAV-based financings secured by the net equity value of a fund’s portfolio investments. These facilities provide lenders with a differentiated credit product supported by portfolio diversification and enhanced returns, while offering funds longer-term, flexible financing alternatives.
For funds and fund sponsors, NAV loans can reduce the pressure to exit portfolio assets prematurely and provide capital to support follow-on investments and short-term debt obligations in varying market conditions.
Hybrid Facilities
We also advise on hybrid subscription/NAV facilities that provide flexible financing solutions throughout a fund’s life cycle. These structures typically emphasize subscription collateral during a fund’s early stages, when uncalled capital commitments predominate, and progressively incorporate NAV‑based features as the fund matures and portfolio assets grow.
Hybrid facilities allow funds, fund sponsors and lenders to align financing structures with a fund’s evolving risk profile, asset base, and liquidity needs, while minimizing the need for multiple standalone facilities over time.
Representative Matters
Subscription Lines of Credit
- Represented the administrative agent in a $500 million syndicated subscription line of credit to U.S. and offshore investment funds, which involved numerous “cascading” pledges, blocker entities, and ECI and UBTI tax considerations.
- Represented a real estate private equity group in connection with a $300 million subscription line of credit from a commercial bank lending syndicate.
- Represented the administrative agent in a $250 million syndicated asset-based facility to a debt-investment fund where the borrowing base assets included consumer and commercial digital loans originated through digital platforms (e.g., fintech lenders).
- Represented the administrative agent in a $170 million syndicated subscription facility (with a $50 million accordion) to multiple investment funds. The borrowing base consisted of callable capital from each fund and their respective Cayman Islands feeder funds.
- Represented the administrative agent in an $80 million syndicated subscription line of credit (with a $50 million accordion) to multiple investment funds. The borrowing base consisted of callable capital from each fund and their respective Cayman Islands feeder funds.
- Represented a real estate investment fund in a $50 million subscription facility with a syndicate of commercial banks to support the deployment of capital into qualifying real estate projects within federally designated opportunity zones. We also represented the manager of the fund, which has more than $50 billion in real estate assets under management.
- Represented the administrative agent in a $50 million syndicated subscription-based facility to multiple venture debt and investment funds. The borrowing base consisted of callable capital from each fund’s eligible investors, each having different advance rates.
- Represented the administrative agent in a $40 million syndicated subscription-based facility to a venture debt fund, with a borrowing base comprised of callable capital from the fund’s limited partners and its U.S. feeder funds.
- Represented the Lender in a $40 million subscription line of credit to a low-income tax credit fund established for regional and national banks to invest as limited partners in non-profit affordable housing developments.
Net Asset Value (NAV) Loans
- Represented the administrative agent in a $425 million syndicated NAV facility for a private equity group that was based upon the value, and secured by a pledge of the borrower’s equity interests in several of its portfolio company subsidiaries.
- Represented a co-lender in a $350 million syndicated NAV-based facility to a venture debt fund. The borrowing base assets primarily consisted of pools of eligible equipment loans made or acquired by the fund.
- Represented a co-lender in a $185 million syndicated NAV facility to a venture debt fund where the borrowing base assets included first lien and second lien loans owed by account debtors in the healthcare, pharmaceutical, and technology sectors.
- Represented the administrative agent in a $40 million syndicated NAV-based facility to a venture debt fund. The borrowing base assets included commercial real estate loans, non-real estate business loans, and first and second lien digital loans.
- Represented the lender in a $30 million NAV-based facility to a venture debt fund. The borrowing base assets included pools of first-lien and second-lien loans (each with different advance rates).
Hybrid Facilities
- Represented a co-lender in a $250 million syndicated “hybrid” NAV/subscription facility to a venture debt fund, supported by a growth capital loan-based NAV formula and tiered advance rates for the fund’s rated, non-rated, and designated investors.
- Represented the lender in providing “hybrid” subscription and NAV credit facilities totaling $75 million to a private debt fund.
