The NAV Trap: When NAV Falls Short of Fair Value

NAV-based valuations are under increasing scrutiny. As regulators, auditors, and investors demand greater transparency, questions are being raised about whether reported NAVs alone capture a fair picture of value. The pressure is mounting for funds to demonstrate discipline, consistency, and rigor in their approach and processes.

Our latest paper examines the challenges of NAV reliance, why oversight is intensifying, and how market participants can bridge the gap between reported NAVs and fair value. Drawing from our work with fund-of-funds, interval funds, and institutional LPs, we outline practical tools to evaluate NAV marks, identify red flags, and strengthen governance. Our aim is to help boards of directors, fund managers, and investors apply NAV-based valuations with greater confidence, consistency, and control.