Athene, an Apollo unit, is one of several insurers ramping up their participation in net asset value financing, an increasingly popular form of borrowing for private equity funds that need liquidity amid a tough market for cashing out holdings.

Demand for these loans is climbing just as US regulators seek to impose higher capital requirements on the largest banks, leading some to be more selective in providing the debt. Enter insurance companies, which havedifferent capital rules than banks and a thirst for high-yielding, long-term assets.

About 20 insurers are investing in NAV loans to private funds, including Pacific Life, Allianz Life and Protective Life, according to regulatory documents and people who work in the industry. In December, investment manager AllianceBernstein LP launched AB NAV Lending with an anchor investment from insurance firm Equitable Holdings Inc.

Athene is perhaps the most high-profile insurer to enter the market, gaining prominence after acquiring large portions of NAV loans that its parent Apollo arranged and syndicated for Masayoshi Son’s SoftBank Group Corp. and Chase Coleman’s Tiger Global Management. Athene’s firepower has given Apollo the ability to lead bigger loans, like the $1 billion NAV loan Warburg Pincus took out in December to pay down bank facilities involving an older fund. […]