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From: petrbk (Rep: 0)Date: 07/10/2016 17:03
Forum: Gurus Answer Questions - Msg #546Thread #673852476 (Rec: 0)
How do withdrawals or deposits impact NAV performance of hedge funds?

I have one rather elementary question. I was going through the reports of one Hedge Fund (i.e. Vltava Fund SICAV http://www.vltavafund.com/assets/dopis_2013_en.pdf) that presents its performance in NAV (Net Asset Value). How do withdrawals or deposits impact NAV? For example: when NAV grows by 20% p.a. (thanks to clients’ deposits) is the profit applied to clients the same (=20%) or can it be different?

To be more specific on my thoughts: Let’s say NAV = £10.000, the new client comes in and deposits another £2.000. From my very laic understanding NAV should increase by 20% although Hedge Fund did not realize any profit. So profit for clients would equal to 0.

So in this case although Hedge fund reports 20% increase in the NAV it was not generated by the profit but rather from additional deposit coming in.

Do I understand this correctly? Could anyone pls explain me what is the real performance of the fund?

Many thanks

NOTE: This message was originally posted on 2016-07-10 12:52:39 by the petrbk.

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