2025 Asia-Pacific Fund Finance Symposium: Key takeaways

This year's Asia-Pacific Fund Finance Symposium convened leading financiers, advisers and borrowers for a full day of discussion and market insight. Held in Hong Kong on 6 November, the event reflected the steady growth and diversification of fund finance across the region, with panel exploring the expanding use of NAV facilities, perspectives from GP and LP, credit ratings to broaden of the creditor base, and spotlight on newer markets such as Japan, India (GIFT City) and Korea.

Key themes from the day included:

• Capital call facilities continue to dominate as the primary financing structure across the markets with pricing notably competitive in APAC relative to other markets. In 2025, the use of Separately Managed Account (SMA) structures remained prevalent in new money deals, with fewer "traditional" subscription lines outside of refinancings, particularly in Australia. Panellists from Europe and the US also discussed the emergence of a term loan sub-tranche in some subscription line facilities as a way for alternative lenders to participate, a development that could see broader adoption in APAC in the coming years.
• NAV financing in APAC from niche to mainstream optionality: Net Asset Value (NAV) financing has firmly shifted from a novel structure in APAC to mainstream with a marked uptick in deal flow through 2025. Sponsors are increasingly comfortable deploying NAV structures for a wide array of portfolio-level solutions. In addition to their traditional use of short-term liquidity bridges, NAVs are being used as flexible tools for acquisitions, distributions, working capital, and foreign investments, supported by tighter pricing and generous LTVs as more lenders attempt to grow their books.
• Investor base reshaping structures: As fund sizes grow and investor expectation shift, general partner (GP) financing is moving to the forefront of fund structuring discussions. A notable trend among institutional GPs is the increasing need for financing to meet co-investment obligations. From the perspective of lenders, GP financing requires a rigorous due diligence process and robust security. Close monitoring of cashflows is also needed. The pricing premium associated with the level of diligence required was noted as a potential deterrent that would need to be weighed up by GPs seeking financing solutions.
• Gradual shifts in investor base: Limited partners (LP) financing is broadening beyond the traditional relationship lending to encompass institutional investors and sovereign wealth funds, with SMA structures becoming a particular focus. At the same time, LPs are also increasingly wary of how funds are using debt facilities. Although many limited partnership agreements (LPAs) now specifically allow NAV facilities, LPs frequently insist on certain safeguards such as prohibitions on using NAV facilities to accelerate distributions – to ensure alignment of interest and prudent leverage management.
• How to manage a challenging exit environment: In an environment where conventional exits remain constrained, GPs are deploying more creative strategies to manage portfolio transitions, preserve value and align stakeholder interest. Amongst the most prominent tools are NAV facilities used to warehouse assets for a continuation vehicle, alongside the role of secondary transactions. However, lenders are concerned that the use of a continuation vehicle must not be used to cover up underperformance in a fund. Other "end of life" solutions floated included stretched and subordinated subscription line facilities, and asset level finance.
• Bridging capital markets and fund finance: Securitisation of fund finance books remains more often debated than deployed across APAC. Nevertheless alternative capital solutions like preferred equity, rated note feeders, and the participations of insurers in subscription facilities – are gaining visible momentum.
• Ratings and insurance: ratings are on the rise in APAC but remain more difficult to obtain than in the US. In the context of NAV facilities, it is important to ensure that a valuation agency incorporates a cashflow analysis as this is important for ratings. Rated facilities open themselves up to a wider pool of creditors, including insurers, whose involvement in fund financing facilities has increased in recent years from both a credit risk insurance perspective and an investor perspective.

Looking ahead to 2026 and beyond, the general consensus was to expect a general uptake in the market after a fairly flat couple of years. Expect a continued rise in private capital and high net worth participation, broader use of NAV facilities amid slow exits, and stronger secondaries and continuation fund activity. Ratings may become more prevalent, catalysing insurance and structured solutions. Private credit penetration will deepen, and fundraising is expected to pick up for Asia homegrown managers.