AB Dimensions Series

Translating Complexity into Opportunity

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As private markets continue to expand and evolve, NAV lending has emerged as a flexible capital source for private equity funds—and a compelling opportunity for insurance investors. It features investment-grade potential, structural downside mitigation and attractive relative value, offering a differentiated way to enhance private-credit allocations.

Why NAV Lending, and Why Now?

The private-equity market has grown rapidly in recent years, and that growth is driving demand for new financing solutions. NAV lending offers private-equity sponsors access to nondilutive capital; lenders get exposure to diversified underlying portfolios and robust structural protections. We believe the NAV lending market is poised to continue expanding, creating compelling potential for insurance investors looking for investment-grade private-credit exposure.

Exploring the Private-Equity NAV Lending Opportunity for Asset Owners

More and more, private-equity sponsors want flexible financing solutions across their funds and management companies. Our latest guide takes a closer look at how NAV lending works, why its popularity is surging, and what insurance investors should think about as they assess the opportunity.

The guide explores:

The fundamentals of NAV lending and loan structures
The factors driving the market’s growth
Structural protections that help mitigate downside risk
The role NAV lending can play in an insurance portfolio
Key considerations for choosing a manager and underwriting opportunities

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As the Playing Field Expands, Insurance Investors Must Stay Nimble

A holistic approach may help investors navigate the diverse, dynamic world of fixed-income opportunities.

For insurance investors, the opportunity set across public and private credit is broader than ever—from corporate lending to asset-based finance. But those investments come in many different forms. As we see it, an all-encompassing approach is better equipped in a diverse plating field to assess relative value, pivot to new avenues and align investments with portfolio, liability and regulatory considerations.

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"Up to 360 bps" refers to an illustrative yield pickup versus a comparable investment-grade corporate bond. It reflects a modeled BBB-rated NAV loan assuming a gross spread of 4.5% over SOFR, upfront fees of 1.25%, and a weighted average life of approximately three years, compared with the Bloomberg Intermediate BBB US Corporate Bond Index (yield to worst of 5.02%); SOFR of 3.68%. Sources: FRED and AllianceBernstein, as of March 31, 2026.

Because a NAV loan's yield is floating and resets with SOFR, this figure is a point-in-time comparison rather than a fixed or guaranteed spread relationship, and it will change as short-term rates move. It is illustrative and modeled — not a projection, forecast, or guarantee of any return — and actual loan terms, yields, and outcomes will vary. Investment-grade NAV lending is Schedule D–eligible; US risk-based capital charges are rating-based, so a same-rated corporate bond carries the same factor. For the full basis of this figure and a complete discussion of the opportunity and its risks, see the paper, "Funding Flexibility," which is available free of charge.