A NAV loan lets a fund borrow against the companies it already holds. $100M against $1B of value is 10%. If the companies fall by half, the loan doesn't, and it's now 20%.
What the film says
In private equity, a fund can borrow against the companies it already owns. NAV loan $1B $100M from a lender 10% of the value Cash out to investors The debt gets paid before they do Down by half The loan does not 20% Ask what the cash is really for
In the glossary: NAV loan
A simple example with round numbers, not advice. Terms vary by fund.
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