Navigating NAV in alternatives

Net asset value (NAV) is one of the principal challenges facing the alternative investment funds sector as it continues its dramatic expansion. 

As alternatives grow in scale, they are attracting a wider base of investors, including pensions funds and retail clients. This expansion brings new demands for timely and accurate NAV data, driven both by investor expectations and regulatory requirements.

Fund managers have the primary obligation for NAV calculation, but depository service providers are required to oversee that process. Claire Matteucci, Head of Depository at SEI Luxembourg, says the requirements are stringent, including cash-flow monitoring and providing extensive documentation often in advance of any investment transaction.

However, these administrative burdens are an inevitable corollary of the expansion of alternative investments to a wider market, including retail investors through Long Term Investment Funds (LTIF). 

Choosing the right partner is key to smoothing the administrative process, ensuring access to timely data through the latest technology, and leaving the fund managers to get on with their core job of investing.