Net asset value (NAV) is the value of an entity’s assets minus its liabilities. It’s most commonly used to describe the per-share value of a fund, but the same underlying logic applies to valuing a private company’s equity, a real estate portfolio, or any pool of assets with claims against it.
NAV answers a deceptively simple question: if you liquidated everything today and paid off everyone you owe, what would be left for shareholders? For daily-traded funds, that number is calculated and published every single day. For private funds, it’s closer to a periodic snapshot.
For a fund, NAV represents what each share or unit would be worth if the fund sold all its assets, paid off all liabilities, and distributed the remainder to shareholders. Mutual funds and ETFs publish NAV daily, typically after markets close; private funds typically calculate it quarterly or as needed for reporting, since many of their holdings don’t have a daily market price.
Example: A mutual fund holding $500 million in assets and $5 million in liabilities, with 45 million shares outstanding, has a NAV per share of ($500M − $5M) ÷ 45M = roughly $11.00 per share.
The basic NAV formula is:
NAV = (Total Assets − Total Liabilities) ÷ Number of Outstanding Shares
For a fund holding a mix of public and private positions, private holdings are typically valued using the most recent fair market value estimate, since there’s no daily trading price the way there is for a listed stock.
NAV is the baseline reference price for nearly every fund, but it’s a snapshot, not a guarantee of what you’d actually receive on exit. Public fund shares can trade above or below NAV, and private fund NAVs are only as fresh as their last valuation update.
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Disclaimer
This content is for informational and educational purposes only. It does not constitute investment advice, legal advice, or a recommendation to buy or sell any security or to pursue any specific investment strategy.
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Paul leads editorial at Augment, building Pulse into the private markets' go-to intelligence source. He also develops editorial content strategies for startups and venture capital firms. Previously, he spent 15 years as a business and opinion journalist at The New York Times, Fortune, Fast Company, Reuters, and more. He believes transparency creates liquidity—and that someone should actually publish what private shares are trading for. He lives in Marin with his wife and two rescue dogs, and wishes he had more time to surf.
Learn moreFor publicly traded funds like ETFs, market price can trade slightly above or below NAV depending on supply and demand. For private funds, NAV is typically the reference price since there’s no public market.
Most private funds calculate NAV quarterly, though some update more frequently around major events like a new funding round in a portfolio company.
Investor sentiment, liquidity, and expectations about future performance can push a fund’s trading price above (premium) or below (discount) its calculated NAV, particularly for closed-end funds.
Yes. NAV reflects the current fair value of holdings, which includes unrealized gains or losses on positions that haven’t yet been sold.
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