Private equity refers to the area of the financial market that enables investments in companies that are not listed on public stock exchanges.
Definition of NAV: NAV stands for net asset value, i.e. the net asset value. It reflects the total value of a fund's investments divided by the number of shares issued. You can interpret NAV as a share price. When NAV rises, so does the value of your shares.
Determining the NAV: Since there are no daily prices for the target investments of a private equity fund, the NAV for a private equity fund is only set at longer intervals. This evaluation makes it possible to transparently present the value of your investment. With a private equity fund, it is more complex to determine a fair value for the found components compared to exchange-traded products such as ETFs or equity funds. This is because the target investments, i.e. the fund components that are decisive for the NAV, are non-exchange-traded companies that must be manually valued. This takes significantly more time than with an equity fund, whose components all have a share price and an ongoing valuation.
The NAV of the UBS ESF is calculated monthly and the NAV of the Moonfare PMO is calculated quarterly after the final closing in March 2026 (previously it was €100).
Scale and meaning: The risk level is given on a standardized scale of 1 to 7. This scale is used to make the risk of different financial products comparable. This scale is not set by NAO, but by the banks themselves. In doing so, they follow a standardized procedure for determining the risk indicator. A low risk level (1) indicates a very low risk, while a high risk level (7) indicates a very high risk.
Calculation basis: Think of the overall risk indicator as a type of traffic light that shows you how risky a particular investment is. This indicator is based on three main types of risks:
Market risk: How much can the value of the investment fluctuate? If the value fluctuates significantly, the risk is higher.
Credit risk: Is there a risk that the company offering the financial product will become insolvent and unable to meet its obligations?
Liquidity risk: How easily can you convert the investment back into money? If it is difficult to sell the investment quickly, the risk is higher.
Risks are often presented on a scale of 1 to 7, with 1 representing a very low risk and 7 representing a very high risk.
Comparative value: For a better understanding, the risk level can be compared with known indices. A broadly diversified global stock index, for example, has a risk level of 4. This level is classified as medium risk. A high-risk leverage product, for example, has risk level 7.
No custody or account management fees: NAO does not charge any custody or account management fees.
Fund Costs: The fund's own costs are directly deducted from the NAV (Net Asset Value). This means no additional fund management costs will be debited from your account. These fund costs include, for example, fees for transactions to acquire new companies for the fund or salaries of the fund's employees.
Entry and Exit Fees: NAO charges entry and exit fees for your investment. The entry fee is 2% of the investment amount. This means if you invest €1,000, your account will be debited a total of €1,020. The exit fee is 0.79% of the sales value.
Net Target Return: Despite these costs, the fund aims for a net target return of over 14% per year. This return is net, meaning it's calculated after all costs have been deducted, including both fund and NAO fees.
Between 2002 and 2022, an investment in Private Equity Funds saw its value increase 11-fold. In comparison, an investment in the MSCI World increased 4-fold over the same period.
The holding period of a private equity investment varies but averages between 4 and 10 years.
Fund managers recommend a holding period of 5 years to exploit the full potential of the investment. However, with NAO, investors have the option to invest every month and also to disinvest on a quarterly basis to meet their individual investment strategies and liquidity needs.
The securities are held by Baader Bank in Germany and are held in the name of the deposit holder. In addition, NAO does not establish intermediaries or special purpose companies for the indirect acquisition of target investments.
Investing in private equity secondary funds offers several benefits. They enable accelerated investment as capital is invested immediately. This results in immediate portfolio diversification. In addition, secondaries can offer shorter holding times as many of the underlying investments are already at a later stage of their development. Investors can also benefit from existing performance data on the underlying investments, which potentially contributes to a better assessment of the risk. After all, entry into secondaries can often be at a lower price than the initial entry price of first-time investors, which offers opportunities for attractive returns.
Private equity provides access to companies outside the stock market environment and thus offers an expanded opportunity for diversification. In addition, it can potentially contribute to reducing the risk of an investment portfolio.
Venture capital is another asset class we will be offering. With venture capital, you can invest in startups and high-growth companies and participate in their success.
NAO makes it possible to participate in the performance of a private equity fund as a savings plan or one-time investment from an amount of just 1€. Investors have the option to invest monthly and disinvest on a quarterly basis.
Through NAO's co-investment approach and the use of fragments, traditional barriers to entry in the private equity sector can be reduced.
The specific fund costs at NAO vary depending on the investment. Detailed information on these costs can be found in the cost transparency document and in the key information document. It is important to note that all costs within the fund are offset directly against the net asset value (NAV) - i.e. as with all fund investments. For the customer account itself, NAO only charges 2% upon entry and 0.79% upon exit.
Private equity can be a long-term investment, but sometimes investors need or want to exit before the end of their originally planned investment period. This is where the PE secondary market comes in. Instead of waiting until a company is sold as a whole or goes public, investors can sell their shares on the secondary market.
The secondary market also provides a valuation for PE investments that are otherwise difficult to value. Prices on the secondary market reflect how other investors see the future prospects and current value of a company involving PE.
These investments from the secondary market are bundled and combined into a fund.
You can find more detailed information here: Private equity secondary market.
Primary funds involve collecting investor capital and then investing it over a certain period into a series of companies or projects. This can mean that a significant portion of the capital remains unutilized for some time until suitable investment opportunities are found.
Secondary Funds, on the other hand, involve the purchase of stakes in existing private equity investments from other investors. This means that the capital is immediately fully invested, and investors instantly receive a diversified portfolio of investments. Additionally, secondaries can offer the advantage of entering an already active fund generation, which may allow investors to see earlier returns and benefit from existing performance data. This can contribute to improved visibility and predictability of performance.