Net Asset Value (NAV)

Definition

Net asset value (NAV) is the benchmark indicator for valuing an investment fund. It is calculated by deducting all of the fund's liabilities (fees, debts, commitments) from the total value of its assets (securities, cash, real estate, or other investments held), then dividing this amount by the number of units or shares in issue. NAV thus represents the unit value of a fund interest at a given point in time, and serves as the basis for subscription and redemption transactions.

Framework in Mauritius

In Mauritius, investment structures — collective investment schemes, funds constituted as a Global Business Company (GBC), or other vehicles dedicated to asset management — fall under the supervision of the Financial Services Commission (FSC), the regulator of non-bank financial services. These structures are administered by a management company licensed by the FSC, which handles, in particular, the calculation and monitoring of NAV in accordance with the fund's constitutive documents and applicable regulations. The valuation method used (listed assets, unlisted assets, real estate, etc.) and the frequency of NAV calculation are specific to each fund and set out in its documentation.

In practice

NAV determines the price at which an investor subscribes for new units or redeems units held: it constitutes the valuation reference at the date of the transaction. For assets traded on an organised market, valuation is in principle straightforward; for less liquid assets (unlisted shareholdings, real estate, or alternative assets), it relies on more complex valuation methods, reviewed periodically. An investor or project sponsor considering setting up or subscribing to a fund domiciled in Mauritius should carefully examine, in the fund's documentation, the NAV calculation method, its publication frequency, and the independence of the valuation function from fund management — these elements vary from one structure to another and must be verified case by case.

Related terms

NAV is closely linked to the concept of the Global Business Company (GBC), a form frequently used in Mauritius to structure investment vehicles, as well as to the Variable Capital Company (VCC), a variable-capital fund structure designed to facilitate successive subscriptions and redemptions of units. It is also related to the Management Company, the entity licensed by the FSC responsible for administering these structures, and to the Financial Services Commission (FSC) itself, the authority supervising all such vehicles in Mauritius.

Related terms