NAV, in private equity, is the fund's net asset value: the marks on the holdings plus the fund's cash, less what the fund owes, at quarter end. Net asset value private equity teams talk about is mostly the first of those, the portfolio's value at the fund's own marks, because in a drawdown fund the cash is small and the debt is usually a subscription line; private equity NAV moves when the marks move, when capital is invested and when holdings are sold. This page is the portfolio's half of NAV as the portfolio lead rolls it forward each quarter, on this site's worked example, and the administrator's half, which is the ledger and not this hub's subject.
The portfolio's value, rolled forward
Opening marks plus new investments at cost, less the cost of the holdings sold, plus the net change in the marks on what is held, is the closing portfolio value: $58,000,000 plus $6,000,000 less $2,000,000 plus $1,000,000 is $63,000,000 on the worked example. Proceeds less the cost of the exits is the realised gain, $3,000,000; with the mark change the quarter's gain is $4,000,000, 6.9% on opening. The portfolio valuation roll-forward works it from five inputs.
The marks behind net asset value: private equity valuation policy, and whose they are
Each holding is marked at the fund's valuation policy, usually the last priced round for a venture position and a method the policy names for a buyout or a building, reviewed by the auditor at year end. The worksheet takes each quarter's net mark change as an input and publishes no method; the mark is the fund's, and the portfolio lead's job is to roll it forward so this quarter reconciles to the last.
The administrator's half
Fees accrued and paid, expenses, cash at the fund, the subscription line, and the split of the whole into each LP's capital account: that is the fund's ledger, kept by the administrator and audited, and it is what turns the portfolio's value into the fund's NAV. This hub keeps the marks the administrator is given and works the portfolio's roll-forward; it asserts no NAV and keeps no ledger.
NAV as the LPs see it
The fund's NAV reaches the limited partners as residual value in the multiples they are sent, TVPI and RVPI on paid-in capital, and in their capital account statements; that reporting is the relationship venture's product at rapportvo.com. NAV private equity funds report is built from the marks this hub keeps, and the boundary between the marks and the report is the boundary between the two hubs.
Where the two halves meet: the reconciliation
Each quarter the portfolio lead's closing marks and the administrator's NAV have to agree on the holdings, and the reconciliation is a short table: every holding's mark in the record against the same holding's carrying value in the ledger, with the differences explained. The differences are usually timing (a round closed after the administrator's cut-off), currency, or a mark the policy committee changed after the record was closed. Doing the table every quarter takes an hour; doing it once at year end, when the auditor asks, takes a week and produces the marks nobody can explain. The record keeps each quarter's marks as they stood, which is what makes the table possible.
Questions people ask about nav private equity
What is NAV in private equity?
The fund's net asset value at quarter end: the marks on the holdings plus cash, less what the fund owes. Mostly the marks, which is the portfolio lead's half; the cash, fees and capital accounts are the administrator's ledger.
How does the portfolio's value roll forward?
Opening marks plus investments at cost, less the cost of exits, plus the net mark change: $58,000,000 to $63,000,000 on the worked example. The free roll-forward works it from five inputs.
Does LPreportly calculate the fund's NAV?
No. It rolls the portfolio's value forward from the fund's own marks and asserts no NAV; fees, cash and the LPs' capital accounts are the administrator's, and the reported multiples are the relationship venture's at rapportvo.com.
How often is NAV struck?
Quarterly for most private equity and venture funds, with the year-end figures audited. The marks behind it move on the same cadence, which is why the portfolio lead's record is kept by quarter and not overwritten: the NAV the LPs saw in March has to be reproducible in September.