Net Asset Value (NAV) measures the market value of an investment fund. NAV is frequently calculated by hedge funds, private equity funds, and other investment funds, such as a regulated investment company (RIC).
How to Calculate NAV
NAV = Net Assets at FMV – Liabilities
Example of NAV Calculation for a Hedge Fund
Hedge Fund A wants to calculate its NAV as of March 31, 2023. The fund’s balance sheet shows the following figures as of March 31, 2023:
- Cash & Cash Equivalents: $750,000
- Investments in Publicly Traded Securities at FMV: $9,500,000
- Investments in Bonds at FMV: $1,000,000
- Accounts Payable: $50,000
- Management fees payable $95,000
- Securities sold short, at FMV: $250,000
Net Assets = (750,000 + 9,500,000 + 1,000,000)
Net Assets = $11,250,000
Total Liabilities = (50,000 + 95,000 + 250,000)
Total Liabilities = $395,000
The Funds NAV = 11,250,000 – 395,000
NAV = $10,855,000