Fund Finance: Case Studies

Michael Schierhold, CFA
Senior Vice President, Head of Private Credit ABF

Suji Kang
Vice President, Credit Analyst

Justin Stach
Managing Director, Head of Private Credit

Structured lending to funds can provide similar returns at potentially lower risk than investing as an LP, with limited J-curve effect—and a range of duration, rate profile, collateral, and risk options to suit most investor needs.

Key takeaways

• The asset class: Fund finance refers to lending to private and alternative asset management companies, with four main sectors based on structure and collateral types: Subscription lines, portfolio finance, GP finance, and structured fund finance such as collateralized fund obligations (CFOs) and rated note feeders (RNFs).
• The appeal: Fund finance is a diverse, well-established market with attractive spreads and a long history on which to base underwriting—and, in the areas where Voya specializes, primarily consists of investment grade opportunities.
• Why now: The rapid scaling of private markets, supported by a broadening investor base beyond traditional institutional LPs, has increased demand for fund level liquidity management, including capital call bridging, portfolio level leverage, and GP financing. In parallel, muted exit activity has accelerated growth in secondaries and continuation vehicles, expanding the need for financing to support LP liquidity.
• Case studies: Four case studies from recent transactions illustrate the wide nature of investment opportunities and collateral types in this asset class.

Exhibit 1: The four main types of fund finance

As of 04/15/26. Source: Voya IM.

READ MORE FROM VOYA INVESTMENT MANAGEMENT

IM5384115

Past performance does not guarantee future results. This market insight has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain statements contained herein may represent future expectations or other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Fund holdings are fluid and are subject to daily change based on market conditions and other factors.

Notice to qualified Canadian recipients: Voya Investment Management Co. LLC (“Voya IM”) is relying on an exemption from the adviser registration requirement contained in section 8.26 of NI 31-103 in the provinces of Ontario, Québec, and Nova Scotia. Please note that: (i) Voya IM is not registered in Ontario, Québec, or Nova Scotia to act as an adviser, (ii) Voya IM’s principal place of business is located in the City of New York, NY, USA, (iii) all or substantially all of Voya IM’s assets may be situated outside of Canada, (iv) there may be difficulty enforcing legal rights against Voya IM because of the above, and (v) Voya IM has appointed McMillan LLP as agent for service of process in Ontario (c/o Leila Rafi, Brookfield Place, 181 Bay Street, Suite 4400, Toronto, Ontario M5J 2T3) and Québec (c/o Enda Wong, 1000 Sherbrooke Street West, Suite 2700, Montreal, Québec H3A 3G4), and Stewart McKelvey as agent for service of process in Nova Scotia (c/o Marc Reardon, Queen’s Marque, 600-1741 Lower Water Street, Halifax, Nova Scotia B3J 0J2).