NAV Financing: How to Access Liquidity Without Selling Your Private Portfolio

NAV financing is a blind spot for most founders with illiquid portfolios. Alex Branton, Managing Partner at Nodem Capital, knows this space well, so we're sharing his breakdown as partner content.

Many founders who exit into $10M+ deploy their capital heavily into private markets. PE funds, venture, co-investments, and direct deals. This makes sense — illiquid assets have historically compounded better over long horizons, and founders have the risk tolerance to ride out lockups.

The problem nobody talks about until it's too late: when 60–70% of your net worth doesn't move, you're one unexpected capital call or life event away from selling your best assets at a discount. I've written about how post-exit wealth destruction actually happens — forced sales under pressure is one of the patterns that keeps repeating.

NAV financing is a structural tool that you probably never heard of. Banks won't explain it because they can't do it well. Wealth managers often skip it because it doesn't generate fees. But it's a useful tool worth understanding, whether or not you ever use it.

Alex Branton from Nodem Capital offered to break down how NAV facilities work, when they make sense, and where the economics actually land. Over to him.

Your Portfolio Is Illiquid. Your Life Isn't.

You exited. You deployed. You did what every smart founder does after a liquidity event: moved capital into private markets. PE funds, venture, direct deals, maybe some real estate. The thesis was sound. Illiquid assets compound better over long-term horizons.

Then life happens.

Capital call arrives early. Co-investment opportunity lands with a two-week deadline. Your tax bill is larger than expected. You want to back a friend's Series B. Or, you need to move cash for personal reasons — property, relocation, family planning — and suddenly you realise that the majority of your net worth doesn't move quickly.

This is the illiquidity trap. Most founders walk into it with their eyes open but no plan for how to walk back out. If you've been thinking about how money actually moves through your portfolio, this is the gap that rarely gets addressed.

Two Default Options Are Both Expensive

Option A: Sell on the secondary market. You find a buyer for one of your LP positions or direct holdings. The process takes months. The buyer knows you need liquidity, so they push for a 25–40% discount to NAV. You accept, because the alternative is worse. You've just paid an enormous hidden fee to access your own capital — and you've permanently given up the upside on what might be your best-performing asset.

Option B: Borrow from your bank. Your private bank will lend against your liquid portfolio — public equities, bonds, cash — but not against the private holdings that make up the majority of your wealth. The rate might look reasonable, but the facility demands monthly or quarterly cash interest. You're now servicing debt from a portfolio that won't produce distributions for years. That's a duration mismatch, and it forces you into exactly the kind of short-term thinking you left the operating world to escape.

Both options punish you for being invested in the asset class that's supposed to reward patience. The structural problem: traditional lending doesn't account for how founder portfolios are actually constructed after exit.

Net Asset Value Financing — the Third Option

Net Asset Value financing lets you borrow against the combined value of your private portfolio — not individual assets, but the diversified basket — without selling anything. You retain full ownership, full upside, and full control.

Critical structural feature is Payment-in-Kind (PIK) interest. Instead of paying cash interest monthly, the interest is capitalised and added to the loan balance. You repay when liquidity actually materialises — a distribution, a realisation, a refinancing event. The cost of borrowing aligns with the underlying assets' timeline. No cash drag. No forced sales to service debt.

Maths on this tends to be straightforward. If a founder needs €25 million from a €150 million portfolio, the choice is between selling a position at a 30% discount — crystallising a €10+ million loss — or borrowing at a conservative 15–20% loan-to-value ratio, keeping the asset, and repaying over three to five years as distributions arrive. The economics are rarely close.

Specialist non-bank providers structure these facilities for founders and family offices with complex, multi-asset private portfolios — the kind of heterogeneous holdings that banks struggle to underwrite.

Four Situations Where NAV Financing Changes the Calculus

Capital calls with short deadlines. Your top-tier GP issues a large, unexpected call. Defaulting damages the relationship and forfeits your allocation. A NAV facility bridges the gap in weeks, with repayment timed to expected distributions from other parts of your portfolio.

Doubling down on winners. One of your direct investments is performing, and a follow-on round opens up. Selling other holdings to fund it is counterproductive. A NAV facility provides you with capital to increase exposure to your best asset while remaining secured against the broader portfolio. If the asset's growth exceeds the PIK cost, the trade is accretive from day one.

Refinancing expensive debt. If you're already carrying a bank loan with 5–7% cash interest against an illiquid portfolio, you're bleeding capital. Refinancing into a PIK structure eliminates recurring outflows. On a €50 million facility, that's €2.5–3.5 million per year freed up — compounding over a five-year term.

Life happens. Property purchases, tax bills, family transitions, relocation. These are real and urgent. A NAV facility gives you the liquidity to handle them without dismantling the portfolio you've spent years building. Founders who handle post-exit transitions well tend to be the ones who build financial infrastructure early, rather than solving liquidity problems reactively.

Why Your Private Bank Probably Can't Do This

Banks are good at lending against things they can price daily: public equities, bonds, property with a recent valuation. They're not built to underwrite a portfolio that includes venture positions, direct operating businesses, LP stakes in multiple funds across jurisdictions, and illiquid side pockets. The risk weightings don't work for them.

This is the same structural gap that's driving growth in private credit more broadly — non-bank lenders filling the space that traditional institutions have vacated or never occupied in the first place.

Specialist NAV providers underwrite the complex, heterogeneous portfolios that banks decline or structure so conservatively that the facility is useless. They offer PIK interest, cash-pay holidays, flexible covenants, and preferred equity structures. The facility works alongside your existing banking relationship — it doesn't replace it.

Building Liquidity Into Your Capital Structure

You built your company with leverage — financial, operational, and intellectual. Your capital should work the same way. We wrote a full playbook on how strategic debt fits into wealth architecture — NAV financing is one specific application of that broader principle.

NAV facility isn't an emergency measure. It's infrastructure. It's the layer in your capital structure that lets you stay fully invested in private markets while maintaining the flexibility to act when opportunities or obligations arise.

You will need liquidity from an illiquid portfolio at some point. Everyone does. The choice is whether you pay for it through secondary discounts and cash-draining bank debt, or build the system to access it on your terms.

About the Author

Alex Branton is the Managing Partner at Nodem Capital, an FCA-authorised asset manager delivering tailored NAV financing solutions to founders, family offices, GPs, and LPs. Nodem specialises in complex, multi-asset portfolios — venture, PE, direct holdings, real assets — with solutions ranging from $15M to over $100M.

For a confidential conversation about how much liquidity you could access without selling, visit nodem.com or reach out to Alex directly.