Hedge fund valuation practices under scrutiny
Under pressure from regulators and investors, hedge funds are establishing robust pricing policies for hard-to-value assets.Rubber stamping the manager's pricing model is no longer acceptable
Hedge funds are hiring independent experts to price complex and illiquid assets as investors and regulators intensify their scrutiny of valuation practices.
"Valuation is a huge reputational risk," says Cyrus Borzooyeh, chief financial officer at Reservoir Capital Group, a hedge fund that invests in public and private markets.
The practice of hiring a fund administrator to essentially "rubberstamp the manager's [pricing] model is no longer acceptable" for regulators or investors, adds Borzooyeh
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