Net asset value (NAV) facilities are secured by the value of a fund’s underlying portfolio and can be structured to cross-collateralize the equity of multiple portfolio companies. The facilities have become an increasingly popular portfolio management tool with PE sponsors, especially when other more traditional sources of liquidity are difficult to access. However, although NAV‑based facilities may be used in a way that ultimately benefits LPs, they may also give rise to conflicts of interest and certain benefits for GPs that come at the expense of LPs. Given the potential pitfalls, the investor community has expressed concerns about GPs’ lack of transparency and engagement with LPs around NAV‑based facilities. To enhance practices as to the use of NAV‑based facilities, the Institutional Limited Partners Association (ILPA) recently issued guidance (Guidance) with parameters for improving transparency, recommendations for working with existing limited partnership agreements (LPAs) and terms to be included in future LPAs, as well as a disclosure template and specific discussion points for LPs to address with GPs. This article summarizes the key takeaways from the Guidance for PE sponsors. For coverage of other ILPA guidance, see “ILPA Guidance Promotes Equitable Framework for Continuation Fund Transactions” (Jul. 27, 2023); and “How ILPA’s Model NDA Could Change Preliminary Due Diligence Practices” (Feb. 16, 2021).