NAV (Net Asset Value)
Net asset value (NAV) is the reported value of a fund’s assets minus liabilities, used to estimate current portfolio value.
Definition
NAV is a valuation-based measure of a fund’s current worth, typically used in private funds and some hedge funds. It reflects underlying asset valuations and is updated on a reporting schedule. Allocator Context Allocators use NAV for portfolio monitoring, exposure tracking, and performance measurement, while recognizing valuation lag and subjectivity in private assets. Decision Authority NAV influences rebalancing and risk oversight; significant valuation changes may trigger committee review or exposure controls. Why It Matters for Fundraising Transparent valuation policies and consistent reporting increase allocator trust, especially for illiquid strategies where marks can be scrutinized. Key Takeaways Snapshot valuation metric More subjective in private assets Used for monitoring and risk controls Reporting discipline builds trust