Eagle Point surpasses $5 billion for niche fund finance strategy

Defensive Income Strategy provides fund-level leverage to wide array of private credit strategies

Eagle Point Credit Management has raised more than $5 billion for a niche fund financing strategy targeting “portfolio debt securities”.

The Greenwich-based manager’s Defensive Income strategy focuses on directly-originated loans to private credit funds, including BDCs, registered closed-end funds, commercial mortgage REITs and private drawdown vehicles – generally to provide leverage or refinance existing debt.

The strategy’s investments are highly covenanted – with a max loan-to-value covenant based on the fair value of the underlying portfolio – and typically carry an investment grade rating from Nationally Recognized Statistical Rating Organizations.

Since launching the strategy in 2020, Eagle Point has raised two commingled funds, and is currently in the market with a third, seeking $500 million.

The firm is also preparing a semi-liquid tender offer fund, EP Private Capital Fund I, running the same strategy, according to our prior reporting.

However, the bulk of the strategy’s $5.5 billion AuM – around 80% – is in the form of separate accounts and funds-of-one, managed primarily on behalf of insurance clients and other institutional investors.

These vehicles are highly customized, but typically operate with a two-year capital call period, followed by a five-year investment and distribution period.

Investors then have the option to re-commit, meaning SMAs can effectively run as evergreen offerings.

Carving out a niche

In the fund financing lifecycle, the strategy falls roughly between subscription lines– which are used early in a fund’s life to bridge funding gaps during a capital call – and NAV financing, which is usually used to finance add-on investments (and occasionally distributions) in mature portfolios which are outside of their investment periods.

Alongside lending to BDCs and traditional closed-end funds, Eagle Point has found a niche lending to funds with strategies and assets that are more complex than traditional middle market loans – for example, non-sponsored direct lending, asset-based finance or a mix of traded and illiquid credit.

“Large scale direct lenders are well served by bank lines-of-credit, but the terms can often be too restrictive and not well-suited for more complex strategies,” says Dan Spinner, senior principal and portfolio manager for the defensive income strategy.

For example, a typical bank LOC may only have a term of two-to-three years, and firm restrictions on the types of loans a fund can invest in.

By contrast, Eagle Point’s defensive income loans can have terms of five years or more, and are secured by a wider array of underlying assets. A loan generally seeks unlevered returns of 8- 11%.

Private debt’s fund financing push

Eagle Point’s strategy is part of a growing trend of private debt managers breaking into fund finance.

Historically, facilities such as subscription lines and net asset value loans were dominated by banks, with Silicon Valley Bank one of the largest players in the asset class.

Following the collapses of SVB and Signature Bank – another key player in fund financing – in 2023, there has been a marked rise in private debt funds following NAV lending strategies.

We tracked a record $12.9 billion of NAV lending fund closes in 2025, including 17Capital Strategic Lending Fund 6, which at $5.5 billion is the largest fund ever to close in the asset class.

Recent NAV lending fund closes

2025 has seen a record of $12.9 billion of NAV finance funds

Date	Fund	Manager	Size
22-Jul-25	17Capital Strategic Lending Fund 6	17Capital	$5.5bn
07-Apr-25	Alpinvest Strategic Portfolio Finance Fund II	Alpinvest	$4bn
21-May-25	Crestline Portfolio Finance Sentry Fund	Crestline Investors	$1.7bn
08-Sep-25	Pemberton NAV Financing Core Fund I	Pemberton Asset Management	$1.7bn

Source: With Intelligence

Several more NAV lending funds are currently in market with targets of more than $1 billion, including offerings from 17Capital, Arcmont, HSBC Asset Management and Pemberton, while Aegon Asset Management, NLC Capital and Varde Partners are all in the market with subscription line financing funds.

Largest fund financing vehicles in market

At least seven funds in market with targets of $1 billion or more

Fund	Manager	Sub-strategy	Target
AlpInvest Strategic Portfolio Finance Fund III	AlpInvest	NAV lending	$5bn
17Capital Credit Fund 2	17Capital	NAV lending	$3.5bn
Pemberton Asset Management	Pemberton NAV Strategic Financing Fund	NAV lending	$2bn
Arcmont NAV Financing Fund I*	Arcmont Asset Management	NAV lending	€1.5bn ($1.75bn)
HSBC NAV Financing Partnership Fund	HSBC Asset Management	NAV lending	$1bn
Aegon Capital Call Finance Fund	Aegon Asset Management	Subscription lines	$1bn
NLC Fund Financing IG Short Dated	NLC Capital	Subscription lines	$1bn