Welcome to Lender Lens, our series for profiling leaders in the Lender community.
With private credit playing an increasingly important role in the financial system, we wanted to find out how lenders are navigating the evolving landscape and how they assess the market in the coming years.
Dealmaking has become more complex in today’s market — and private credit is adapting.
Founded in 2011, Arcmont has raised more than €45bn and has relationships with 135-plus private equity sponsors, making it well-placed to best understand how the firm can best cater today’s market.
In this edition of Lender Lens, we speak with Peter Hutton, Head of NAV Financing at Arcmont, about the evolving nature of private credit and how Arcmont has adapted and continues to develop strategies to meet the increasing demand for differentiating private credit solutions. Peter also discusses Arcmont’s position as a significant lender to private equity and how its experience in this field allows it to benefit from increased NAV financing.
What have been the biggest changes in how private equity uses private credit, and specifically NAV financing, in the last five years?
As a pioneer of private credit in Europe – having invested over €45bn in the last 15 years – Arcmont has benefited from private equity sponsors’ increased demand for private credit solutions: with enhanced flexibility, large ticket sizes, speed and execution certainty.
But one of the biggest changes over the last five years has been the proliferation of private credit solutions outside of just direct lending; for example, NAV financing & GP solutions.
Over the past few years, NAV financing has exploded in popularity – Arcmont estimates ~40% of mid-market private equity sponsors in Europe have already executed a NAV loan transaction. This is in part driven by the returns focus shifting from solely asset-level to also fund-level: including accretive value creation, managing the gross to net spread, and liquidity management.
We estimate two-thirds of NAV loans were a private credit solution; we expect that trend to continue and firms such as Arcmont to benefit.
Has the recent slowdown of private equity dealmaking presented a challenge for Arcmont? Is borrowing by sponsors instead being used to bolster existing investments through increased value creation?
2026 has been yet another record year for deployment at Arcmont. Benefitting from a large portfolio representing a captive deployment opportunity, high-quality sponsor relationships and a stable, largely institutional capital base – Arcmont is well positioned to capitalise on the broader market. Specifically in NAV financing, we believe our existing relationships and in-depth knowledge of the underlying assets offer a compelling advantage for sponsors: attractive terms, a more nuanced due diligence approach and lower execution risk.
We see a slowdown in M&A as a significant opportunity. With increased focus on managing fund IRRs and fund j-curves, a desire for fundraising flexibility, and an expanding list of use cases for NAV & GP solutions, Arcmont’s NAV strategy is well placed to capitalise.
Why is Arcmont best suited as a lender specifically to private equity and their portfolio companies?
Arcmont – alongside its sister Churchill Asset Management in the U.S. – is part of Nuveen Private Capital, a $99bn AUM mid-market private capital specialist and “one stop shop” for mid-market sponsors. At LP level (primary LP commitments), GP level (GP financing), fund level (NAV financing, GP-led secondaries) and asset level (senior & junior debt financing, equity co-invest), Arcmont & Churchill provide a global, “full stack” offering. This “closed loop” approach serves to drive synergies: the better we understand the sponsor and their assets, the more attractive financing solution we can provide.
We believe “NAV-only” solution providers without single asset investing experience may be exposed to hidden risks in the underlying portfolio.
As NAV facilities become an increasingly important financing tool, has Arcmont needed to adapt its own strategy in order to cater for growing demand and if so, how?
The private equity NAV market continues to evolve. One of the key focus areas for us in the last 12 months has been structuring innovation: depending on financing instrument, fund structure, security, borrower type, jurisdiction, tax domicile to name a few. Our view is that lenders will increasingly need to marry the technical flexibility they can offer from their own pools of capital, with the ability to structure and price the different types of risk for sponsors. For this reason, we believe it’s critical to have a team with multiple asset class experience to speak the same language.
If you had not ended working in finance, what career path would you have liked to have taken?
My background is foreign languages so my dream growing up was to become a diplomat. But after living in Russia for a year working with the UN, I realised I was better suited to the safe world of NAV financing!
