Flexible Fund Finance

As a featured contributor to Brickfield’s 2025-2026 Compensation Report, Joseph M. Pennini, Managing Director and Group Head of Fund Finance at Customers Bank, shared insights into what his team is experiencing in the market, what trends they see on the horizon and how they are leaving their mark in the growing fund finance space.

What We’re Seeing: Growth in Secondary Funds and NAV Loans

Investor demand for liquidity is driving greater reliance on secondary funds, while longer hold periods and the rise of continuation funds are fueling growth in NAV loans. Today’s NAV loans move beyond fund guarantees and reserved capital, incorporating liquidity or net worth covenants for added flexibility.

Our Solution: Secondary funds appeal to Customers Bank’s Fund Finance team for their strong asset diversification. We prefer to lend against a diversified pool of assets (not a single asset) or concentrated pool of assets supported by uncalled capital. We also evaluate General Partners’ ability to meet future capital calls, often structuring net worth and liquidity covenants to ensure commitments are funded.

What We’re Seeing: Rise of SMAs and Retail Funds

Institutional investors are increasingly seeking separately managed accounts (SMAs) to secure preferential terms around fees and limited liability, while retail funds and evergreen structures are gaining traction among individual and high net worth investors. Many lenders are reluctant to extend credit to single-investor funds due to concentration risks or sovereign immunity concerns.

Our Solution: Customers Bank partners with GPs to design facilities that deliver execution today with the flexibility to upsize tomorrow. We evaluate factors such as investor creditworthiness, fund experience, GP relationships and supporting documentation to structure resilient solutions. With evergreen funds, where commitments can be unpredictable, our team has successfully crafted facilities by lending against underlying assets, applying liquidity covenants and carefully reviewing redemption provisions to safeguard stability.

What We’re Seeing: Focus on Relationship-Driven, Flexible Financing

Fund sponsors are turning to partners who put relationships first and are looking to be served holistically. The market volatility in 2023 and early 2025 demonstrated just how critical those relationships can be.

Our Solution: Customers Bank is dedicated to delivering exceptional service and flexible solutions that drive growth and enhance operational efficiency. We can adapt to our clients’ immediate needs and provide strategic guidance and custom financing capabilities to accelerate our customers’ success, as they define it.