In this episode of How I Invest, Alex Simpson of LiquidLP discusses NAV loans, which allow LPs to borrow against their illiquid assets in private funds. He explains the advantages of NAV loans over secondaries, noting that loans allow LPs to retain ownership and potential upside while accessing liquidity. Alex details LiquidLP's focus on ultra-high-net-worth individuals, family offices, and smaller institutions, offering bespoke loan solutions ranging from a few million up to $50 million, with interest rates varying based on the quality of the underlying collateral. He differentiates LiquidLP from larger institutions by emphasizing their speed, flexibility, and focus on lending relationships rather than wealth management. The conversation also covers loan-to-value ratios, the diligence process, the importance of understanding the borrower's financial behavior and the intended use of funds, and the potential for partnering with funds to provide standby NAV loan facilities. Finally, Alex shares the origin story of LiquidLP and his approach to building an effective advisory board.
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