Reading the age of the portfolio from the schedule of investments, by cost, by fair value and by tranche, and what each one hides.
Take each holding's acquisition date from the schedule of investments, measure its age at the reporting date, and weight the ages by fair value: that is the age of the NAV you own. On an illustrative eight-company fund at 31 December 2025 the fair-value-weighted holding period is 4.19 years, against 3.93 by cost and 3.94 as a simple average, and 43.6 per cent of the fair value sits in companies held for more than five years.
Worked in full in How to Read a Private Fund's Financial Statements by Julian R. Sterling, with every figure reproduced in a free workbook.See the book on Amazon →
A fund's financial statements give you the fair value of every holding and, in most schedules of investments or the notes beside them, the date it was first acquired. Nobody prints the average age, but it is one of the more useful numbers you can derive. It tells you how much of the NAV is waiting on exits that should already have happened, how it compares with the time left in the fund's term, and whether the reported multiple is being carried by companies the manager has held for a long time without selling. The same arithmetic, applied to exits rather than holdings, is how a track record's realised holding period is computed.
| Holding | First acquired | Age, years | Cost | Fair value | Multiple |
|---|---|---|---|---|---|
| Alder Foods | June 2018 | 7.50 | 40.0 | 30.0 | 0.75x |
| Corran Logistics | March 2019 | 6.75 | 35.0 | 72.0 | 2.06x |
| Elmfield Software | September 2020 | 5.25 | 50.0 | 95.0 | 1.90x |
| Hartley Dental | June 2021 | 4.50 | 45.0 | 58.0 | 1.29x |
| Kestrel Packaging | March 2022 | 3.75 | 55.0 | 60.0 | 1.09x |
| Lowther Testing | December 2023 | 2.00 | 60.0 | 66.0 | 1.10x |
| Marlow Care | September 2024 | 1.25 | 40.0 | 41.0 | 1.02x |
| Pennant Data | June 2025 | 0.50 | 30.0 | 30.0 | 1.00x |
| Total | 355.0 | 452.0 | 1.27x |
Agei = (reporting date − acquisition date) ÷ 365.25
Fair-value-weighted holding period = Σ (fair valuei × agei) ÷ Σ fair valuei
In Excel, with dates in B, fair values in E and the reporting date in H1: =SUMPRODUCT(E2:E9, ($H$1-B2:B9)/365.25) / SUM(E2:E9)
Step 1: age each holding. Alder Foods, bought at the end of June 2018, is 7.50 years old at the reporting date; Pennant Data is 0.50.
Step 2: weight by fair value. The fair value times age products add to 1,895.2 on 452.0 of fair value: 4.19 years. The largest contributions come from Elmfield Software and Corran Logistics, two older companies carried well above cost.
Step 3: compare the other weightings. Weighted by cost the products add to 1,393.5 on 355.0 of cost: 3.93 years. The simple average of the eight ages is 3.94 years. The fair-value figure is the highest because the older holdings are, on balance, the ones marked up.
Step 4: bucket the NAV by age. The three holdings older than five years carry 197.0 of fair value, 43.6 per cent of the total, on 125.0 of cost, or 35.2 per cent. Together they are marked at 1.58x, against 1.27x for the fund.
| Age | Holdings | Cost | Fair value | Share of fair value | Multiple |
|---|---|---|---|---|---|
| Under 2 years | 2 | 70.0 | 71.0 | 15.7% | 1.01x |
| 2 to 4 years | 2 | 115.0 | 126.0 | 27.9% | 1.10x |
| 4 to 6 years | 2 | 95.0 | 153.0 | 33.8% | 1.61x |
| Over 6 years | 2 | 75.0 | 102.0 | 22.6% | 1.36x |
The NAV this LP owns is, on average, 4.19 years old, in a fund with 2.50 years left of its term. Of the 97.0 of value above cost, 85.0, or 87.6 per cent, sits in the buckets over four years. That is not a criticism: older companies have had time to grow. It is a statement about where the fund's remaining return depends on exits that have not yet been agreed, and which marks a reader should test hardest against the Level 3 disclosures.
| Scenario | Fair value | Fair-value-weighted | Cost-weighted |
|---|---|---|---|
| As reported | 452.0 | 4.19 | 3.93 |
| Corran and Elmfield sold at fair value | 285.0 | 3.19 | 3.31 |
| Alder written down to zero | 422.0 | 3.96 | 3.93 |
| Hartley dated by tranche | 452.0 | 4.06 | 3.80 |
| One year later, no exits | 452.0 | 5.19 |
Selling the two older winners makes the portfolio a year younger, but what is left is marked at 1.06x. A falling average age is good news only if the exits behind it were the right ones. Writing Alder off also shortens the fair-value figure, without a single sale, which is why the cost-weighted number is worth carrying beside it: marks cannot move it. And Hartley Dental, dated from its first investment, is 4.50 years old; its 30 first tranche of June 2021 and 15 follow-on of June 2024 give an age of 3.50 years by tranche.
Dating the portfolio from the fund's vintage or first close rather than from each holding's acquisition date, which makes every company as old as the fund. The second mistake runs the other way: dating each holding from its first cheque when much of its cost arrived later in follow-ons. Where the notes show acquisition cost by tranche, weight by tranche. Where they do not, say so, and treat the result as an upper bound.
All names and figures are illustrative. Some schedules of investments show only the year of first investment; use mid-year dates and state it.
Weight each holding's age by fair value to find how old the NAV is: 4.19 years on this fund, with 43.6 per cent of it in companies held over five years and 2.50 years of term left. Carry the cost-weighted figure beside it so that marks and write-offs cannot flatter the trend. The book walks through the schedule of investments line by line, and the free workbooks for the book rebuild a complete reporting pack you can run this on. See also a fund's multiple without its largest investment and what a fund term extension costs the LPs.
By fair value when the question is how old the NAV you own is, because that is the value still waiting to be realised. By cost when you want a measure that marks cannot move. On the worked fund the two give 4.19 and 3.93 years; the gap comes from two older winners carried at 2.06x and 1.90x cost.
Dating a holding from its first investment overstates the age of capital added later. In the worked case a 30 first tranche in June 2021 and a 15 follow-on in June 2024 give an age of 3.50 years by tranche against 4.50 from the first date, and the fund's fair-value-weighted figure falls from 4.19 to 4.06 years.
That realisations are overdue relative to the fund's term, and that the NAV depends on exits not yet agreed. On the worked fund 43.6 per cent of fair value sits in companies held more than five years, with 2.50 years left before the term ends. The figure becomes 5.19 years a year later if nothing is sold.
This article is one calculation from How to Read a Private Fund's Financial Statements. The book takes the same case from first principles to the decision, chapter by chapter, and every figure it prints is a live formula in the free companion workbooks.
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