Net Asset Value (NAV)

Net asset value, or NAV, is the value of an entity's assets minus its liabilities at a stated date. For an open-ended public fund, NAV may be calculated frequently and used to set a per-share dealing price. In private funds, the manager or administrator typically reports NAV periodically, often quarterly, based on the fund's accounting and valuation policies.

Private NAV is an estimate, not a promise of sale proceeds. Underlying investments are fair-valued periodically using current information and can be written up or down between financing rounds. Debt, accrued fees, expenses, foreign exchange, and the investor's share of the vehicle also affect the reported amount.

Why it matters for family offices

NAV is a central input to net worth, allocation, and private fund performance. It forms the remaining-value component of TVPI and helps reconcile the investor's capital account. Because private statements arrive with a lag, a consolidated report may combine current public prices with private NAVs from an earlier date. That difference should be visible.

The office also distinguishes manager-reported NAV from adjusted internal estimates. If a known sale, write-down, or cash flow occurs after quarter end, policy may permit an update, but the source and method should be documented. Silently mixing estimates makes comparisons and later reconciliation difficult.

How it shows up in practice

Suppose a family owns an interest in a venture fund with a reported quarter-end NAV of $6 million. One month later, a portfolio company announces weaker results and the manager issues an interim write-down that reduces the family's share by $800,000. No new financing round has occurred, but the fair-value estimate has changed based on new evidence.

The family office records the revised value, its effective date, and the manager notice rather than waiting for an external transaction. It separately records a distribution received after quarter end. The consolidated report shows which values are current market prices, which are manager NAVs, and how old each private valuation is, allowing the family to understand the precision and timing behind total wealth.