[Verse 1] In private equity world there's a number you should know Net Asset Value tells you how your investments grow Take the fund's total assets minus liabilities too Divide by outstanding shares and NAV comes through [Chorus] NAV shows what you own, what your stake is really worth Assets minus debts divided by shares on earth Mark to market quarterly, fair value is the way NAV tells the story of your PE fund today [Verse 2] Portfolio companies valued at their current price Not what was paid before, that wouldn't be precise Independent appraisers help determine what it's worth Comparable transactions give fair value birth [Chorus] NAV shows what you own, what your stake is really worth Assets minus debts divided by shares on earth Mark to market quarterly, fair value is the way NAV tells the story of your PE fund today [Bridge] Management fees and carry reduce the final score Unrealized gains lift NAV higher than before Limited partners check their statements every quarter NAV determines if their wealth is getting shorter [Verse 3] Fund managers use NAV to track performance trends Show investors clearly how their money transcends When companies improve their NAV will rise up high When deals go poorly watch that number say goodbye [Chorus] NAV shows what you own, what your stake is really worth Assets minus debts divided by shares on earth Mark to market quarterly, fair value is the way NAV tells the story of your PE fund today [Outro] So remember NAV when private equity calls your name Assets minus liabilities divided just the same By outstanding shares to show what you truly own NAV's your compass in the PE danger zone
← PE Valuation Methods: Comparables and DCF | IRR: Internal Rate of Return Explained →