Liquidity and credit solutions in private equity: Lessons from the 2026 Private Equity CFO Conference

Private equity firms have spent much of the past several years understanding liquidity path and credit solutions. Over that period, the range of available solutions has expanded considerably. How general partners are implementing those solutions and how limited partners are evaluating them were prominent topics at this year's Citizens Private Bank CFO Conference.

One of the advantages of bringing together CFOs, lenders, tax specialists and legal advisors is the opportunity to share different perspectives on the challenges facing private equity firms. Discussions extended to the governance, disclosure and investor communication considerations that increasingly influence how liquidity and credit solution strategies are implemented and how those decisions are received by investors. Below are several of the key insights that emerged from those conversations.

Why private equity firms are expanding their liquidity and credit toolkit

Several panelists spoke about the evolution of fund finance over the past several years, pointing to the rapid growth of private markets, increased assets under management, greater competition for alpha, the operational demands of more complex funds and legal structures and the increase in the number of lenders in the space.

Subscription facilities were discussed as one example of that evolution. Once viewed primarily as a tool for managing capital calls and cash flow timing, they are now a routine part of fund operations and investment strategy. Their widespread adoption reflects a broader shift within private markets, where financing structures are increasingly being integrated into portfolio and liquidity planning rather than treated as purely administrative solutions.

Beyond subscription facilities, the discussion reflected the growing range of liquidity solutions available to private markets firms. Participants referenced net asset value loans, continuation vehicles, structured secondaries, GP-level financing, management company financing and other forms of fund finance that can be tailored to different objectives and circumstances.

Why continuation vehicles and NAV loans are receiving greater attention

Continuation vehicles are gaining broader recognition across private markets while the NAV lending market has grown exponentially over the last three years. As these transactions become more common, sponsors are increasingly discussing them during fundraising conversations and, in some cases, evaluating whether governance frameworks, consent mechanics, investor protections and disclosure expectations should be addressed more explicitly in fund documents.

Valuation remains a key concern. Continuation vehicles require LPs to make an important decision: sell an interest, maintain exposure through a rollover election or potentially increase their investment. That decision depends in large part on confidence that the transaction reflects fair market value and that the process supporting the valuation is robust.

As a result, fairness opinions receive particular attention. Panelists noted that fairness opinions have become an increasingly important tool for helping LPs evaluate continuation vehicle transactions, particularly where questions may arise around valuation, conflicts of interest or alignment between selling investors, rolling investors, new capital providers and sponsors. Price discovery processes, third-party participation and rollover rights were discussed as additional mechanisms that can help investors evaluate whether a transaction is being conducted on fair terms.

A key takeaway from the NAV lending topic was that while structure, collateral and use of proceeds remain critical, the best NAV lending relationships are built on more than documentation and advance rates. NAV lenders are increasingly focused on partnering with sponsors to be accretive to a fund's portfolio performance, which makes transparency, responsiveness and alignment especially important. The panel emphasized that best practices in sourcing and using NAV facilities start with a clearly defined purpose, whether supporting portfolio company growth, funding follow-on investments, bridging liquidity timing or avoiding forced asset sales.

There was also emphasis on thoughtful coordination across a fund's broader capital structure. One practical example is a fund that already has a subscription line in place and later seeks a NAV facility as the portfolio matures. In that scenario, both the NAV lender and the subscription lender need to understand each other's position, collateral package, the fund's objectives and risk concerns to arrive at reasonable terms when decisions need to be made quickly.

Why LP expectations are continuing to rise

As continuation vehicles and other liquidity solutions become more common, many LPs are approaching these transactions with prior experience and established expectations. Investors increasingly understand the mechanics of these structures and are asking more detailed questions during both fundraising and transaction discussions.

That familiarity is influencing conversations earlier in the fund lifecycle. Fund managers are now expected to address topics such as the potential use of NAV loans, continuation vehicles, consent rights, governance processes and investor options during fundraising, creating an opportunity to establish expectations before specific transactions emerge.

Several speakers also emphasized the importance of ongoing communication with LPs. Fund managers who maintain regular dialogue with LPs may be better positioned to explain the rationale behind future liquidity decisions, address concerns efficiently and build support for proposed transactions.

How flexibility is created during fund formation

Several speakers emphasized that a firm's flexibility later in a fund's lifecycle is often influenced by decisions made during fund formation. Partnership agreements, side letters, borrowing provisions, transfer restrictions and governance frameworks can all affect the range of options available when liquidity events or financing opportunities arise.

That reality has prompted some sponsors to think more deliberately about future liquidity considerations while raising a fund. Discussions around continuation vehicles and financing solutions highlighted this trend, with some firms evaluating whether governance structures, consent processes and investor protections should be addressed more explicitly during fund formation.

Final thoughts: Execution and relationships still matter

No single liquidity solution fits every situation. The appropriate approach depends on a fund's objectives, the characteristics of the underlying assets, the composition of the investor base and the outcome a sponsor is trying to achieve. Throughout the conference, speakers repeatedly returned to the importance of matching the structure to the circumstances rather than defaulting to a particular instrument.

That reality places a premium on execution. Strong relationships can help firms preserve flexibility and execute effectively as liquidity decisions become more nuanced. This year's conference reinforced the value of bringing together sponsors, investors, advisors and financing providers to share experiences, compare approaches and discuss the practical considerations that influence execution.

Through its work with private equity sponsors and investors, Citizens Private Bank regularly helps clients evaluate liquidity, financing and capital structure decisions. Events such as the Citizens Private Bank CFO Conference are one way the firm facilitates those conversations and helps clients stay informed about emerging trends and evolving market practices. To learn more about the topics discussed at the conference and how they may apply to your firm, contact your Citizens Private Bank relationship manager.

For additional insights from the conference, read our 2026 Citizens Private Equity CFO Conference recap.