Net Asset Value (NAV)

NAV is familiar from mutual funds and ETFs, where it is calculated daily using observable market prices. In private markets, the concept is the same in principle but very different in practice: there are no daily market prices, so managers estimate NAV using models, comparable transaction data, and periodic appraisals. Private fund NAV is reported quarterly and is always, to some degree, an informed estimate rather than a verified market fact.

This distinction matters enormously for wealthy families allocating across both public and private assets. When a family reviews their consolidated balance sheet, the private markets portion — real estate, private equity, private credit — reflects NAV figures that may lag reality by months. A portfolio might appear stable during a market dislocation simply because private valuations have not yet been updated. Families examining overall asset allocation should hold this caveat clearly in mind.

A common confusion is treating reported NAV as synonymous with liquidation value. If a family needed to sell a private fund stake today, they would likely transact on the secondary market at a price that could differ — sometimes substantially — from the last reported NAV. Subscription line borrowing can also briefly inflate per-share NAV figures early in a fund's life, a nuance explored in the subscription credit line entry.