An Eye on NAV: Tools for Oversight and Contingency

The following report provides a high-level landscape of the major vendors within the net asset value (NAV) oversight and contingency ecosystem. It also highlights consequential business drivers that are facilitating the development of this vital process. In addition, it offers historical context by outlining several major events, including COVID-19, that have impacted asset managers’ (AMs) views of oversight and contingency tools

During the past few years, Celent has observed heightened interested around validating the primary NAV. A confluence of exogenous and industry-specific events have prompted AMs to demand independent verification measures which are aimed at ensuring the third-party administrator (TPA) or custodian’s pricing is accurate. Further it has become increasingly commonplace for AMs to employ robust contingency tools which, in the event of a fund administrator outage, are able to strike an accurate NAV. In Celent’s conversations with over two dozen AMs some recurring questions are:

·How do I check my NAV that was produced by my custodian or fund administrator?

·How do I produce a NAV should there be a business or technology disruption with my outsourced NAV?

·How can I automate manual processes and increase scalability?

·Do I need a secondary NAV? How can I maintain independence?

·How does the NAV fit within my contingency and business continuity plan? (BCP)

In response to an increased emphasis on oversight and contingency, vendors supplying these services within the NAV landscape have invested significant resources to improve their offerings and distinguish themselves within the marketplace.