CONSHOHOCKEN, PA — Cox Capital Partners is launching a pilot lending program that would allow large investors in non-traded business development companies to borrow against their holdings rather than sell at a discount, offering an alternative for shareholders facing restrictions on withdrawing money from private investment funds.
The Conshohocken-based firm plans to offer loans equal to 50% to 65% of the net asset value of eligible holdings, initially targeting investors with positions of at least $1 million in non-traded business development companies, or BDCs, managing more than $1 billion in assets.
The proposed financing would provide shareholders with access to cash while their investments remain subject to the underlying funds’ periodic repurchase programs, according to Cox Capital.
Non-traded BDCs invest in private companies but generally lack the daily trading liquidity available to shareholders of publicly listed securities. Investors seeking to withdraw capital typically must rely on periodic repurchase offers, which may limit the amount of shares a fund will buy back.
Those programs frequently cap quarterly repurchases at approximately 5% of outstanding shares. When req...