A Comparison Between Two Liquidity Solution Tools: Preferred Equity and NAV Facilities

In this article, Kirkland partners Robert Emerson, Susannah Amini and Jacqueline Eaves discuss situations under which a sponsor may wish to compare and contrast the benefits and limitations of NAV facilities and preferred equity at the fund level to select the most appropriate structure.

“In both cases [NAV facilities and preferred equity], there is no substitute for reviewing the full terms in the round and selecting a bespoke solution best suited to the particular transaction objectives. In addition it is important not to lose sight of how investors may view any financing. Both structures offer nuanced liquidity tools that may be relevant in a wide variety of scenarios – either on their own, or in combination with other structures.”

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