Net Asset Value (NAV) is the total fair market value of all assets held by a fund, minus any liabilities and accrued fees. For a private equity fund, NAV represents the current marked value of the portfolio companies — effectively the unrealised paper value of investments not yet exited. NAV fluctuates as investments are marked up or down in periodic valuation exercises (typically quarterly).
NAV is the basis on which RVPI (Residual Value to Paid-In) is calculated, and it is used to determine the size of the management fee in the harvest period. LP interests in private funds are traded at a discount or premium to NAV on the secondary market, reflecting liquidity preferences, manager quality assessments, and portfolio concentration.