All the Rage in Private Equity: Mortgaging the Fund

At the Milken Institute’s Global Conference, a controversial financial practice among private equity firms was highlighted. These firms are increasingly taking out net asset value loans, which means they are borrowing against the businesses they already own through previous loans. This method is gaining traction as firms seek quick ways to raise capital, especially during slower dealmaking periods when they need to raise new funds but have not yet returned cash to their previous investors.