Market downturns caused by a tightening credit cycle should continue to boost demand for NAV lending, says Crestline's Dave Philipp.
How will an economic downturn affect NAV lending? What about rising interest rates? Understandably, there is an ongoing downturn debate in the fund finance industry. Economic downturns that stem primarily from an increase in interest rates and overall capital cost have different effects on market participants with access to dry powder, versus those that do not. This is true for companies, funds and LPs. Companies with access to dry powder are better positioned to source good acquisition opportunities and are more resilient during performance challenges.