Valuations & NAV

An investment's value can change because the fund adds capital, receives a distribution or gains or loses value. A valuation identifies what the position is worth at a date; NAV combines the fund's assets and liabilities.

Explain the change before calling it a return

A change in position value can contain both capital flows and investment return. To explain it, compare the opening value with the closing supported value, then identify contributions, distributions and any relevant FX effects in between. New capital raises the position's value without being an investment gain. A distribution can reduce the remaining value without being an investment loss.

In this hypothetical example, an investment was worth USD100,000 at the previous valuation. The fund then contributes USD15,000, and a later supported valuation is USD120,000.

Value increased by USD20,000, but USD15,000 was new capital. Only USD5,000 remains to explain as valuation movement before considering other flows and FX. Calling the full USD20,000 investment performance would mix funding with return.

A supporting source might be a manager's valuation statement, an approved appraisal or another documented valuation calculation. Check what position it covers, its currency, method and valuation date. A file's arrival date is not necessarily its valuation date.

Record the value and review its accounting

A valuation mark identifies the entity, investment, value and effective date. The related valuation adjustment is the accounting needed to bring the ledger to the supported value. Saving the mark does not prove that adjustment exists or is Posted.

Use Valuations & Allocations and the related journal views to inspect the mark and accounting. Compare the position's intervening contributions and distributions before accepting the movement.

If the latest source is older than period end, identify the stale date and use the organization's approved valuation policy for subsequent flows or a new mark. Do not silently relabel an old source as a period-end valuation. For a foreign-currency position, confirm the reporting currency, FX source and applicable rate date under that policy; separate FX movement from underlying value movement when reviewing the bridge.

Compare NAV on the same basis

NAV is assets less liabilities. Review the GL and gross NAV before applicable fees, then review fee effects and period capital allocations. Class-specific participation and fees can produce different results between classes.

For a comparable fund, class and investor-capital tie-out, match the included population, date, currency and gross/net treatment first. On a complete consistent scope, class net assets and investor capital should reconcile to the corresponding fund net assets. A difference needs a bridge; a simple sum across incompatible scopes does not establish an error.

Use Accounting Review & Close for Gross NAV, Fees and Capital Allocations checks. Use Investor Capital Accounts for investor accounting balances.

Operational Fund Overview can derive a value from flows when no independent valuation exists. Its saved Cedarbridge example has that fallback. A displayed value or zero IRR there is not proof of an approved valuation or final investor return. For the intended financial output, follow the specific Reports guide; do not assume every output is a NAV-per-unit statement.