NAV reconciliation is the daily process of matching the fund administrator's books of record — positions, transactions, pricing, cash, and corporate actions — against the custodian's records and the sub-advisor's trading records before the fund strikes NAV under Rule 22c-1's forward pricing requirement. Mismatches between the three books produce breaks. Breaks resolved after strike become as-of corrections, pricing adjustments, and — at the materiality threshold — NAV errors that trigger reimbursement analysis and board-level disclosure. A parallel "shadow NAV" is sometimes calculated independently by the sponsor as a check on the admin's strike.
The NAV Reconciliation Problem
The NAV strikes every business day at 4 p.m. ET. Between the close and the strike, the fund administrator's books, the custodian's positions and transactions, and the sub-advisor's trade records need to agree on what the fund owns, at what price, and what cash moved. In practice, they often don't — and the breaks are usually discovered after the NAV is already out the door.
The evidence lives in three places. The fund admin's books sit in the admin's system (Ultimus, SEI, ALPS, SS&C, BNY Mellon, State Street). The custodian's positions and cash sit at the custodian. The sub-advisor's trades sit on the sub-advisor's blotter, which may not hit the admin's system until the next morning. Reconciling them today is often a spreadsheet-based exercise emailed between fund ops, sub-advisor ops, and the admin's account manager.
Pricing exceptions — stale prices, fair value determinations under Rule 2a-5 — live in PDFs attached to daily email from the admin. As-of transactions, when a trade posts retroactively, create breaks on prior days that ripple forward. Dividend record dates, corporate actions, and fair value hits are applied on different timing by admin, custodian, and sub-advisor, producing breaks that look structural but are really timing.
When a break stays uncorrected and moves NAV by more than the firm's materiality threshold — typically 0.5% of NAV — the firm enters NAV error territory: reimbursement analysis across affected shareholders, board-level disclosure, and an audit trail that has to be reassembled from email, spreadsheets, and broker statements. This is exactly the kind of incident where the evidence was always theoretically available but never actually assembled.
What Automated NAV Reconciliation Requires
Three-Way Reconciliation
Fund admin, custodian, and sub-advisor books compared continuously — positions, transactions, cash, and pricing — not once a day in a spreadsheet the morning after.
Pre-Strike Exception Flagging
Breaks surfaced before 4 p.m., not after. Fund ops and sub-advisor ops see the same exception list, with severity and ownership already assigned.
Pricing & Fair Value Log
Daily pricing, stale price events, and fair value determinations joined to the holdings and trades they affect, with lineage back to the fund admin's source feed.
Corporate Action Alignment
Splits, dividends, mergers, and spin-offs normalized across admin, custodian, and sub-advisor so timing mismatches are explainable rather than mysterious.
As-Of Transaction Tracking
Retroactive trades that rewrite prior-day books are surfaced immediately with their downstream NAV impact already calculated.
Shadow NAV Calculation
Optional independent NAV calculation on the firm's own data as a control against the admin's official strike — useful for larger complexes and CFO oversight.
How Milemarker Automates It
Milemarker ingests daily feeds from the three books that need to agree. Fund admin positions, transactions, pricing, fair value log, and corporate action records come in from Ultimus, SEI, ALPS, SS&C, BNY Mellon, or State Street. Custodian positions, transactions, and cash balances come in from the custodian of record. Sub-advisor trade blotters come in via SFTP, OMS integration, or file drop — whichever the sub-advisor supports.
Everything is normalized into a single security master keyed on CUSIP, ISIN, and SEDOL so the same security is the same record across all three sources. Accounts, portfolios, and fund share classes map to a unified hierarchy. Corporate actions, dividends, and fair value events become first-class records with effective dates — not footnotes on a spreadsheet.
Break detection runs continuously throughout the day. Positions that don't match, cash that doesn't tie, trades that appear on one blotter but not another, and prices that diverge beyond threshold all surface in one exception view that fund ops, sub-advisor ops, and the admin's account team can see at the same time. Severity, ownership, and SLA are assigned automatically.
Navigator AI investigates breaks in plain English. "Why is our XYZ cost basis different from the admin's?" "What's the history of fair value events on this security over the last 90 days?" "Which trades posted as-of more than five business days late last quarter?" Answers come from the firm's Snowflake warehouse with full lineage, which means every finding has source evidence behind it.
Milemarker Relay automates the routing. When a break is detected, it goes to the right operations owner with a 2-hour resolution SLA, the underlying detail already attached. When a NAV error crosses the materiality threshold, the reimbursement analysis workflow kicks off from assembled evidence — not a forensic pull three days later.
Who This Is For
Fund Operations Teams
The fund ops team running daily reconciliation between the admin and the sub-advisor is the first beneficiary. Work that was spreadsheet-based, email-driven, and after-the-fact becomes continuous, queryable, and pre-strike. The people doing the hardest daily work in the fund complex get the most immediate lift.
Fund Accounting Leaders
The head of fund accounting — often a director or VP overseeing the admin relationship and the firm's NAV integrity — needs visibility across every break and every as-of adjustment. A unified reconciliation data layer provides that view continuously, not just in the monthly operating committee slide.
CFOs Overseeing Fund Administration
CFOs at fund sponsors — including firms like Flat Iron Wealth that run proprietary '40 Act funds alongside an RIA — need oversight of admin performance without being the one reconciling. Milemarker gives the CFO a structural view of break volume, resolution SLA, and admin service quality without adding headcount to the middle office.
Sub-Advised Fund Sponsors
Sponsors of sub-advised funds face the full three-way reconciliation challenge by definition. When the portfolio is traded somewhere outside the sponsor, the data gap is structural. Milemarker closes it without replacing the sub-advisor's trading desk — the sub-advisor keeps trading, the sponsor gets the visibility.