Hedge Fund NAV

CFA Level I Derivatives
#1

ive seen multiple ways of this. some explain it where HFs have 2 NAVs (reporting and trading) where the quartes are average and adjust for liquidity respectively.

another answer talks about using the bid for long and ask for short.

not sure if these are conflicting or maybe im just missing something.

any comments? thanks

#2

They are not coflicting- for reporting purposes NAV is estimated as either using bid for long position and ask for short position or average of bid and ask for all positions.

For trading purposes, from the reporting NAV a liquidity adjustment is substracted.