The growth of the fund finance market, from the development of the subscription line and NAV or asset backed facility, to the array of products and credit lines now available, has been remarkable.

While banks have traditionally dominated this space, and that is expected to long continue, one recent trend we are seeing in our deals is the growth of alternative (non-bank) providers of this finance, including credit and specialist funds.

Alternative lenders in the fund finance space are not huge in number (at least as lender of record) but they are by no means new entrants, with their participation in the market pre-dating Covid-19. However, the increased need for GPs to be creative in their capital raising solutions because of the crisis has resulted in us seeing increasingly complex types of facilities being made available (and the consequent rise in pricing is creating more attractive yields for non-bank participants). With this, we may well see a greater appetite for fund finance products from alternative lenders, who can increasingly be on hand to offer liquidity solutions.