At Jasper, we're committed to making investing in Commercial Real Estate more fair and transparent. Part of that is ensuring our Investors understand the Net Asset Value ("NAV") they receive for every $1 they invest, we call this the Net Asset Value Returned on Investment ("NAV ROI"). Unfortunately, it isn't commonplace for real estate fund managers to clearly disclose the NAV ROI, we think it should be.

How to think about NAV ROI

When you invest in a private real estate fund, the money raised by the fund manager is used to purchase the properties, provide some working capital for the fund, and cover the costs of establishing the fund. The establishment costs typically include the Manager's own fees plus costs to the fund such as legal fees, accounting fees, valuation fees, bank fees, supervisor fees, insurance costs etc.

Here is an example from the initial capital raise for Jasper's Industrial Income Plus Fund. The money raised, together with the bank financing, was allocated as follows:

Purchase price for Initial Properties

$25,175,000

Establishment Costs

$1,258,750

Working Capital

$100,000

Total

$26,533,750

This was funded by:

Investors’ capital

$15,205,000

Bank Loans

$11,328,750

Total

$26,533,750

The NAV ROI is then calculated as follows:

Net Asset Value day one

$14,820,313

Number of $1 units issued to Investors

$15,205,000

NAV ROI

$0.9746

As you can see, the size of the establishment costs and the value of the properties relative to the purchase price affect the NAV ROI. To put this number in context, most private real estate funds have a NAV ROI of $0.90 - $0.94. So at $0.9746, Jasper is leading the market.

We do this by:

  • building technology that creates operational efficiencies, so we can pass these efficiencies onto our investors in the form of lower fees.

  • using proprietary data, deal-flow and extensive industry experience to ensure we buying assets at or below-market valuation.

So if you look at your Portfolio for a recent investment and see the NAV of your holdings is less than the amount you originally invested, it's likely due to the establishment costs of the offer, and perhaps the valuation of the assets compared to the purchase price. As a rule of thumb, the smaller the establishment fees and the higher the asset valuations compared to purchase price, the smaller the gap between NAV and your original investment amount will be.

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