Private Equity Funds Tap Exotic Loans for Liquidity as Deals Ebb

Private equity firms are increasingly turning to an unconventional type of debt to shore up portfolio companies as surging interest rates and declining valuations make it harder to sell assets, fund distributions and raise money for new investments.

So-called NAV loans, which allow firms to borrow against a pool of portfolio companies within a fund, are gaining in popularity, with more traditional financing options drying up.