Rede’s 2026 NAV financing survey confirms that NAV lending is now a core fund finance product, not a special-situation workaround. The survey is based on 36 active lenders and shows continued growth in 2025: weighted average completed NAV volume per lender rose to about €830 million from €805 million in 2024, while completed deals increased from 4.4 to 5.4 per lender despite reviewed deals being essentially flat. That points to a higher conversion rate and a better-quality borrower pipeline. Banks are now driving the larger end of the market: median bank NAV volume tripled from €150 million to €500 million, and banks accounted for 60% of reported lending volume, up from 27% the prior year. Conventional PE NAV leverage remains moderate, with facilities rarely above 20% LTV and generally not below 5% unless tied to a specific use case.
Pricing has tightened. Weighted average secured NAV margins fell to 4.8% from 5.2%, while recourse-light margins fell to 6.1% from 6.6%, according to the survey. The secured/recourse-light gap narrowed to 130 bps from 140 bps. Banks are materially inside alternative lenders on price: 3.0% target margin for secured deals versus 5.6% for alternative lenders, and 4.2% for bank recourse-light structures versus 6.8% for alternative lenders. The results suggests private credit NAV lenders are less competitive in middle-of-the-fairway situations, but more likely to work through structural complexity, higher LTV, looser sweeps, longer cure period, and smaller fund situations.
Use of proceeds is also shifting. NAV facilities are being used less as a pure DPI-management tool and more as capital-efficient portfolio support: 50% of lenders saw an increase in follow-on investment use, and 47% saw an increase in new-investment use. That said, DPI use may come back if exit markets remain slow and all-in NAV debt costs remain contained. The forward outlook is positive but more subdued: 75% of lenders expect NAV transaction volume to increase in 2026, down from 87% last year, and only 11% expect significant growth. Similarly, 36% of lenders expect spreads to rise over the next 12 months, versus 17% expecting further tightening. Continuation vehicles remain one of the more important growth channels, with 42% of lenders completing a NAV or hybrid facility on a continuation vehicle in 2025 and 75% expecting more activity in 2026.