Partner content by Alex Branton, Managing Partner at Nodem Capital.
If you have been following the financial press lately, you have likely noticed a fierce debate surrounding the credit markets.
The reality on the ground is starkly different from the pessimism sometimes found in the papers, especially when it comes to Net Asset Value (NAV) loans to family offices.
When utilised correctly, a NAV facility secured by your HoldCo is arguably the most efficient, cost-effective tool available to finance your next acquisition.
Before we look at the mechanics of why that is, let’s address two common misconceptions:
Liquidity issues versus credit underwriting failures
Starting in late 2025, the media narrative surrounding private credit dramatically soured. This was triggered by a few high-profile frauds/bankruptcies. The data reveal that this is generally a structural plumbing issue for retail-oriented vehicles, not a systemic credit failure.
The core problem appears to be a liquidity mismatch: retail evergreen structures are offering short-term redemptions on long-dated underlying loans
The underlying credit fundamentals of the asset class remain sound. Recent data from the end of 2025 shows private credit default rates holding steady at 2.46% (Proskauer Private Credit Default Index).
Furthermore, core underwriting metrics remain robust; average leverage multiples for direct lending have stayed completely stable at around 5.5x debt-to-EBITDA throughout 2025 (Debt Market Insight Q4, Raymond James IB).
For a family office utilizing a bespoke NAV loan, retail liquidity mismatches are entirely irrelevant. Those of us operating in the institutional credit space are far less concerned than the casual observer reading the financial headlines.
PIKs at the OpCo vs. HoldCo
Another headline-grabbing topic is PIK (Payment-In-Kind) interest. Critics rightly point out that if used poorly, PIK interest can affect an operating company by increasing its debt burden to unsustainable levels.
However, NAV loans operate on a different plane. By placing the debt at the HoldCo level - secured by your broader portfolio of assets or shares - you are not encumbering your underlying operating companies. You gain the leverage required for growth without risking the foundational stability of the assets generating your wealth.
The family office acquisition advantage: why NAV financing works
Once you cut through the macroeconomic noise, the upside becomes clear. Family offices have historically left substantial equity tied up in their HoldCos. A well-structured NAV facility transforms that dormant equity into an agile war chest.
Here is why it’s such a powerful acquisition tool:
Speed: Traditional acquisition financing can be a grueling, months-long slog of underwriting, syndication, and red tape. In competitive environments, cash is king, and speed is the ace. Because a NAV loan is backed by your existing HoldCo shares or a designated portion of your assets, it can generate the capital fast.
Cost of capital: By collateralizing the loan against a diversified pool of assets at the HoldCo level, the risk profile is lower compared to a standalone leveraged buyout at the OpCo level. This structural safety can translate into a cheaper cost of capital for your family office.
Cutting through the complexity: One of the biggest hurdles family offices face is borrowing against illiquid or hard-to-value private assets. NAV financing providers understand this - we do not rely on rigid, third-party formulas. Where items are more difficult to value, we work directly with you to establish a sensible, transparent valuation methodology. We operate as a partner, supporting you through the entire process to unlock your capital safely and efficiently.
The bottom line
While the media focuses on retail redemption gates and theoretical debt burdens, the smartest money is quietly optimising its capital stack and moving quickly on time-sensitive deals.
-
Alex Branton is the Managing Partner at Nodem Capital, a leading investment firm that delivers tailored Net Asset Value (NAV) financing solutions to GPs, LPs, and Family Offices. The firm underwrites and provides facilities against complex baskets of illiquid global assets.
Led by Branton, a Cambridge Associates alumnus, Nodem Capital is authorised by the UK Financial Conduct Authority and backed by leading institutional investors, including the Lepercq Group. The size of their solutions ranges from $20m to over $100m.
Partner with Mr Family Office
Reach 75K+ family office community professionals & UHNWIs.
Across our website, social media and newsletters, Mr Family Office connects with an engaged global family office audience.
