Cayman Islands fund finance intelligence – 2026 half year update

Having passed the mid-way point of 2026, we look at fund finance trends our Cayman team observed in the first half of the year.

Executive summary

2026 so far has seen robust and relatively stable activity levels in the US fund finance market, with little sign of the peaks and troughs observed in past years.

Geopolitical risk, the AI growth story in public markets and interest‑rate conditions have dominated headlines in financial markets generally, but the quieter story is the stable demand for subscription lines of credit and NAV facilities, showing the maturity of the fund finance industry.

Key highlights 

Origination

Newly originated facilities still accounted for the majority of closings in H1 2026, but a slightly lower relative share of overall closings when compared to 2025 data.

Products

Subscription facilities continued to form the backbone of the market, yet NAV and hybrid facilities gained a higher share of total deals when compared with 2025, continuing a now multi-year trend we continue to monitor with interest.

Pricing trends

The median margin on subscription debt came in incrementally lower (c. 10bps) when compared with same pricing data in 2025. The reduced rate of tightening potentially signals a possible bottoming out of spreads following an intensive 12–18-month period of re-pricing activity.

Lender dispersion

We observed a notably diverse group of lenders in H1 2026, which includes both a broader range of bank lenders as well as non-bank lenders.

Who’s borrowing

Borrower profiles included a large share of private credit funds, but our 2026 transactions so far have also seen an increase in the number of real estate funds as a total share of borrower strategies.

About our Fund Finance team

Our cross-practice Fund Finance team advises open-ended and closed-ended funds established in the Cayman Islands, the BVI, Jersey, Guernsey and Luxembourg, as well as bank and non-bank lenders to those funds.

We regularly advise on the structuring and implementation of subscription credit lines, NAV facilities (including hybrid arrangements), GP loans and other fund level leverage and related security arrangements. We often do so in conjunction with leading law firms onshore.