The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) (Soul Patts) share price has soared 16% since the start of 2025. After such a strong rise, it's worth questioning what the investment house's true value is.

This investment business has been operating for 120 years, providing investors with stable earnings and a dividend in each of those years.

It's a great business, but every investor needs to come to a conclusion about what price they'd be willing to pay to invest in Soul Patts shares.

The importance of the net asset value

Some businesses have a lot of assets on their balance sheets, such as real estate investment trusts (REITs). For businesses like that, it's important to pay attention to the connection between the share price and the reported net asset value (NAV).

However, for other businesses, the underlying value is influenced by the earnings. ASX growth shares are often priced for their expected future earnings rather than the (relatively small) size of the balance sheet.

Sometimes businesses can provide exposure to a mixture of both a strong balance sheet and rising earnings. I certainly think that description applies to Soul Patts shares – the business has a large investment portfolio and its private equity earnings are growing.

The company is invested in a number of areas including telecommunications, resources, swimming schools, financial services, property, credit, electrification, agriculture, funerals and more.

Each time the company announces its result every six months, it tells investors what its NAV is.

When it announced its FY25 half-year report, it revealed that its pre-tax net asset value was $12.1 billion. Of course, that NAV value changes every day as share prices of its investments on the ASX change.

Brickworks merger

However, following the merger announcement with Brickworks Ltd (ASX: BKW), the company has shot higher. According to the broker Macquarie, on 2 June 2025, Soul Patts shares were trading at a premium of around 40% to its underlying NAV.

But, since then, the Soul Patts share price has dropped 7.7%, so its valuation is more appealing now than it was near the start of the month.

Despite that, some investors may be looking at Soul Patts shares as expensive.

For at least a couple of reasons, I think it could be unwise to underestimate the current value offered by the investment house.

Firstly, the business has a number of private equity/private business investments that I think could be worth more than what Soul Patts is valuing them at.

Second, I think Brickworks is worth more than what Soul Patts is paying for it, particularly if we factor in expected interest rate cuts in the next 12 months. While it seems as though there's a large premium today, I think the building product businesses and industrial properties could be worth materially more in a year compared to today.

My 2 cents on Soul Patts shares

I wouldn't call the investment house cheap today. It is trading higher than its NAV, but I'd say it's worthy of trading at a premium.

With the Soul Patts share price now trading at a cheaper price than it did initially after the merger, I think it looks more compelling.

I'd still be willing to buy Soul Patts shares, though it'd be even more appealing at a smaller discount compared to the NAV. But, in five years, I think the company's NAV and share price could be substantially higher, which is why I'm focused on the long-term returns.