The proportion of private equity sponsors who expect that fund finance activity will increase in the near term significantly rose in Dechert’s annual outlook survey.
The law firm said that 36 percent of respondents in its 2026 Global Private Equity Outlook anticipate it will grow over the coming 12-18 months. In contrast, Dechert noted that just 2 percent of respondents gave this answer previously.
There were slight variations for this answer by respondents’ regions. They ranged from 31 percent of those based in EMEA expecting a rise, to 38 percent of those in North America.
The survey was conducted on Dechert’s behalf by Mergermarket, with a sample of 100 top private equity executives located in North America, Asia Pacific and EMEA.
Dechert explained that sponsors are turning to fund finance – and other tools – to adapt to the present fundraising climate. Fund finance was the third-most cited approach respondents named when asked how they are navigating their fundraising challenges, coming in at 42 percent – worded as using “portfolio-wide leverage,” with NAV loans given as an example. Respondents were allowed to cite multiple approaches.
Entering new investment strategies and using GP-led secondaries (continuation vehicles) were the first and second-most cited approaches, coming in at 64 percent and 46 percent, respectively.
Dechert said that fund finance has taken off amid GPs’ growing demand for liquidity. And it pointed to its slew of potential use cases, ranging from paying for GP commitments to supporting portfolio companies.
In a question, the survey directly touched on one of these: borrowing to support funds’ investments. And it found that a sizable portion of respondents anticipate that they will increasingly do so over the near term.
Specifically, 46 percent expect this growth over the coming 12-18 months. Fund finance was also worded as “fund-level leverage” for this question, with NAV loans cited as an example.