Valuation under the microscope

Hedge fund valuation is coming under more scrutiny than ever before. Kris Devasabai speaks to industry experts about best practices in this area and how the framework of the US Financial Accounting Standard Board’s classification of financial assets based on the inputs used to determine their value is affecting the industry.

Hedge fund valuation has emerged as a key concern among investors and regulators worldwide. The issue reached a tipping point during the financial crisis. As markets went into meltdown many hedge funds found they were unable to liquidate their holdings at the prices communicated to investors, forcing them to recalculate their net asset values (NAVs) or suspend or gate redemptions until markets recovered.

The adoption of robust valuation policies and procedures will go a long way towards restoring