Rate cuts may put novel fund financing on the radar, but S-E Asia’s lenders need to up their game

FUND finance 2.0 could get a boost from an expected cut in the United States’ federal funds rate next week, but market players also noted that South-east Asia’s lenders are only just getting familiar with the more complex forms of private equity (PE) leverage.

While subscription line financing is common, other forms such as net asset value (NAV) financing are less so. Adoption is growing, but regional lenders could take time to shift from their present conservative positions.

“People here are just starting to become alive to what NAV financing can do,” said Seah Beelee, a partner at law firm Norton Rose Fulbright (Asia) who specialises in fund finance.