Real Estate Investment Funds Debt Financing Strategies: NAV, Subscription, and Hybrid Facilities
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Real Property - Finance
- event Date
Tuesday, February 11, 2025
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will discuss debt financing options available to real estate investment funds, the common structures and terms for these fund financing products, and the advantages and disadvantages of each. The panel will focus on the increasing popularity of net asset value (NAV) financing and the relationship of fund finance to mortgage debt at the property level.
Mr. Shultz has successfully negotiated and closed billions of dollars of complex debt financings for his clients. He counsels clients in connection with fund finance, including capital commitment-secured credit facilities, NAV credit facilities, hybrid subscription facilities, management lines of credit, general partner financings and employee co-investment facilities. Mr. Shultz is a noted voice in the fund finance arena, has published numerous articles on fund finance topics and has served as a panel moderator at the Fund Finance Association’s Global Symposium. He leverages this expertise and thought leadership to help his clients navigate the most complicated and cutting-edge fund financing structures.
Ms. Edelboim has more than a decade of experience in fund finance transactions, having worked on some of the largest deals with the biggest syndicates. She advises banks and other financial institutions on syndicated, club and bilateral subscription credit facilities, as well as NAV facilities, hybrids, management fee lines, GP Financings, Capital Relief Trades and other, often bespoke, fund finance transactions. With significant experience in both borrower- and lender-side representations, Ms. Edelboim has often been called upon to help clients devise creative structures that reflect evolving regulatory requirements and investor trends. She also has deep experience advising ratings agencies and providers of financial guaranty and other insurance products in fund finance transactions. Ms. Edelboim’s industry leadership is reflected in her frequent role as faculty member, panelist, speaker and author on cutting-edge fund finance issues.
Prior to joining HPC, Mr. Titolo was a Managing Director and Head of Direct Private Investments at MassMutual Life Insurance Company, where he founded and led the company’s Direct Private Investments business, now known as Barings Portfolio Finance. Growing the business to $26 billion AUM, he led a 30 person global team that originated capital-efficient, investment-grade portfolio loans and minority GP equity investments for the MassMutual general account. Prior to joining MassMutual, Mr. Titolo held alternative investment roles at Hartford Investment Management, Credit Suisse, and United Technologies corporate pension.
The current distressed commercial real estate market presents unique opportunities for private real estate investment funds. For real estate funds, third-party debt financing can provide capital to take advantage of these investment opportunities, meet financing needs, and achieve other objectives.
Fund financing products can take on several forms, including: traditional subscription credit facilities secured by the capital commitments of a fund's investors; management fee lines of credit secured by the fees the fund manager receives for managing the fund's investments; partner loan programs offered to fund investors or the general partner; NAV credit facilities secured by the fund's investment portfolio; or hybrid credit facilities combining certain aspects of subscription and NAV credit facilities.
Each fund financing product has unique structuring attributes and certain facilities may be more appropriate depending on where the fund is in its lifecycle and the desired use of the financing proceeds. NAV credit facilities have become increasingly popular due to liquidity challenges and the demand for capital solutions. Thus, it is important for counsel and market participants to gain a deep understanding of NAV facilities, including their structures, applications, and potential risks.
Listen as our authoritative panel discusses the various financing alternatives available to real estate investment funds and provides strategies for using each form of financing under current market conditions.
- Market overview: real estate funds and opportunistic investing
- Common fund financing products and structures and terms, including:
- Subscription credit facilities
- Management fee lines of credit
- Partner lines of credit
- NAV credit facilities
- Hybrid credit facilities
- Considerations: including the interaction between mortgages and fund financing
- Examining the rise in the use of NAV facilities
- Practitioner takeaways
The panel will review these and key considerations:
- What are the common fund financing options available to real estate investment funds, and how do they interact with property-level (mortgage) debt?
- How are fund financings structured and what are some of the benefits to real estate investment funds that utilize fund financing?
- Why has NAV financing become an increasingly popular option for fund financing and what are the key considerations and strategies when utilizing NAV facilities?
