Discount, re-rating and total return calculator

In short

What closing the gap is actually worth.

Interactive: discount, re-rating and total returnMedium

Net asset value per share $ Market price $ Target discount at exit % (negative = discount) Holding period (years) Distribution yield %

Current premium / discount: —
Gap per share: —
Price at the target discount: —
Return from re-rating alone: —
Total, if NAV is flat: —
Health warning: —

A wide discount is only an opportunity if something forces it to close — a buyback programme, a continuation vote, a wind-up, or an activist. Absent a mechanism, discounts have persisted for decades, and buying one purely because it is wide is a bet on other people's future enthusiasm. The distribution yield here is on NAV, and a fund paying distributions out of capital is shrinking the NAV that the discount is measured against.

The idea behind it

This calculator belongs to Alternatives & Private Markets, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.

Instruments it applies to

Hedge Fund — Not an asset but a licence: pooled capital free to go long, short, levered and anywhere — strategies as the product.
Royalty Stream — Buying a share of somebody else's revenue, forever or until a patent expires. Top-line exposure with no operating costs — and a valuation that lives or dies on the terminal assumption.

More calculators from Alternatives & Private Markets

MOIC ⇄ IRR converter — private-fund return arithmetic.
Fee drag over time — what 2-and-20 compounds into.
Sharpe & Sortino ratio — return per unit of risk taken.
PE fund waterfall (simplified) — gross to LP-net, past fees, pref and carry.
The unrecoverable cost of owning vs. renting — the unrecoverable cost of each, per year.

All calculators

Not advice. This explains how something works; it is not a recommendation, and nothing here is tailored to you. You can lose everything you put in — with leveraged instruments, considerably more. StrikeAndYield is not a regulated firm and provides no financial services.

The same in full — six points, and why each one matters

No advice, no recommendation. Nothing on this page constitutes investment, financial, legal, tax or accounting advice, a personal recommendation, or an offer or solicitation to buy or sell any financial instrument.
Nothing here is tailored to you. This is written for a general audience. It does not consider your objectives, financial situation, knowledge, time horizon or tolerance for loss.
The examples are simplified. Worked examples use round numbers and leave out costs, spreads, taxes, collateral, settlement and market conventions that materially change real outcomes.
The models are teaching models. Formulas shown are standard textbook formulations. Institutions add calibration, live market data and credit, funding and capital adjustments — nothing here will reproduce a dealer’s quote or produce a valuation you can rely on.
These instruments carry risk. You can lose your entire investment. Leveraged instruments — futures, options, CFDs, perpetual futures and similar — can cost you considerably more than you originally deposited.
We are not a regulated firm. StrikeAndYield is an independent publication by DELISORIA. It is not a bank, broker, fund manager or licensed adviser, it provides no financial services, and reading it creates no client relationship. For decisions about your own money, consult a professional licensed in your jurisdiction. See the full disclaimer.