Shadow NAV & independent NAV Oversight.

Your fund administrator’s NAV is built from data you supplied — so a mis-booked trade, a missed corporate action, or an incorrect accrual passes straight through into the official number. HedgeGuard maintains an independent shadow book, valued daily from documented sources, and reconciles it against the administrator at fund and share-class level before publication — across TradFi and crypto.

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Share classes 4

Within tolerance 3

To attribute 1

Shadow vs official NAV

Class A · EUR Matched 0.4 bps

Class B · EUR Matched 0.2 bps

Class I · USD Pricing source 12 bps

Class I · Digital sleeve Matched 0.6 bps

Variance attribution

3 corporate bonds · stale close Pricing 11.4 bps

Management fee accrual Fees 0.6 bps

4 share classes struck 1 variance attributed Cut-off 17:00 CET

What it is

A second independant calculation.

A shadow NAV is your own valuation of the fund, maintained in parallel to the administrator’s and reconciled against it before publication. Not a duplicate — an independent check, struck daily while the official NAV may be monthly.

Documented valuation

Every position priced from a defined source at a defined cut-off, configured per fund and recorded. This is the first thing an auditor asks to see, and the first thing that explains a variance when one appears.

Fund and share-class level

NAV struck per share class, not just per fund — so differing fee structures, currencies and crystallisation schedules are checked separately rather than netted into a single fund-level number.

Variance attribution

Detection is not enough. Each difference is attributed to a cause — pricing source, trade-date timing, corporate action, fee accrual — so the answer to an allocator question is evidence rather than an estimate.

Custodian and prime broker records for positions and cash
Fund administrator official NAV and share-class breakdown
HedgeGuard internal shadow book, valued daily
Exchange, custody and on-chain records for digital assets
Discrepancy in any one source raised as a break with an owner

SOURCE 01

Custodian

Positions, cash, holdings

SOURCE 02

Administrator

Official NAV, share classes

SOURCE 03

Internal book

Shadow NAV, valued daily

OUTCOME

Breaks

Raised, owned, aged, resolved

What it catches

Ordinary friction, found early.

The variances that recur are unglamorous. They happen at every fund. What differs between funds is how long they survive before someone catches them — a break found the day it occurs is a conversation, the same break at month-end is a reconstruction.

Pricing differences

Different sources, or the same source at different cut-offs. Persistent in anything not exchange-traded at a clean close, and in digital assets where venue prices diverge.

Trade-date timing

Captured on trade date on one side and settlement date on the other. Individually small, compounding across a busy month.

Corporate actions

Dividends, splits, spin-offs, mergers. The classic source of a NAV error that survives several months before anyone notices.

Fee and accrual errors

Fee on the wrong base, performance crystallisation handled differently across share classes, an accrual set once and never revisited. Quiet, cumulative, and they surface at audit.

Run it yourself or have us run it

Two ways to operate.

Shadow accounting once meant a parallel operations function. It does not have to.

In-house on HedgeGuard

Your operations team runs the shadow book on the platform. Valuation, reconciliation and variance attribution are configured once and run daily, with an exportable evidence trail behind every check.

Managed by HedgeGuard

A HedgeGuard operations team maintains the shadow book, runs daily reconciliation and attributes variances on your behalf, under your brand — then hands the work in-house on the same platform when you are ready.

05 / FAQ

Shadow NAV & NAV oversight.

Shadow NAV is a second, independent calculation of a fund’s net asset value, maintained in parallel to the fund administrator’s official NAV and reconciled against it before publication. Positions are valued daily from documented price sources at a defined cut-off, then matched against custodian and administrator records so variances are attributed rather than inherited.

No. Shadow accounting runs in parallel to your administrator, not instead of them. Your administrator continues to strike and publish the official NAV; the shadow book gives you an independent set of numbers to check it against. Independent third-party valuation is a governance control most allocators expect you to keep.

Because the administrator’s NAV is built from data the fund supplied. A mis-booked trade, a missed corporate action or an incorrect fee accrual passes straight through into the official number. Operational due diligence questionnaires now routinely ask who verifies it, and relying solely on the administrator tends to generate follow-up questions rather than close the topic.

A three-way reconciliation matches three independent records of the same book: the custodian’s positions and cash, the fund administrator’s official NAV, and your internal shadow book. Because no single source is treated as authoritative, an error in any one of them surfaces as a break rather than being inherited silently.

Daily. The argument for frequency is not thoroughness but the age of the problem when you find it — a break caught the same day is usually one analyst and one afternoon, while the same break caught at month-end means reconstructing events three weeks old, after positions have moved and counterparty recollection has faded.

Yes. A HedgeGuard operations team can maintain the shadow book, run daily reconciliation and handle NAV oversight on your behalf as part of outsourced middle-office services, then hand the work in-house on the same platform when you are ready.

The same way as for traditional assets, with two differences that matter: crypto settles continuously rather than T+1, and venue prices diverge, so the pricing source and daily cut-off must be documented and applied consistently. HedgeGuard values digital assets in the same cycle as equities and bonds and reconciles them against exchange, custody and on-chain records.

Next step

See your NAV variances before they publish.

Book a working session. We’ll walk through your current NAV process, your administrator relationship, and what shadow NAV oversight looks like on your data.

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