Premium/Discount

The NAV of a listed private equity company devided by the outstanding shares results in the NAV per share which can be compared with the daily observable share price. The pricing gap between the share price of a listed private equity company and the undelying NAV per share gives a first indication of the current market pricing level of the listed private equity company.

When comparing the NAV per share to the share price there are two cases to distinguish: (Link: NAV Direct)

• The share price exceeds the NAV per share: the company trades at a “premium” to its fundamental value. That means that an investor pays a supplement to the fair value of the underlying private equity portfolio.

• The share price is below the NAV per share: the company trades at a “discount” to its fundamental value. That means that an investor purchases the private equity portfolio for less than the fair value.