Complexity and variety of products impacts pricing and servicing

Fund managers are facing increased regulatory obligations, a rapid growth of complex assets and structures, as well as greater investor demands for transparency and liquidity. Considering market pricing and risk after the subprime fallout is a major concern for any manager dealing with hard-to-value or over-the-counter products.

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Applying rational controls to ensure consistency with marketing pricing and the benefits of independent pricing services as well as the criteria for selecting providers, are important considerations. Over-the-counter (OTC) valuation is increasingly important. As scrutiny from institutional investors, compliance officers, risk managers and internal boards of directors increases, investment managers are taking a keen interest in how complex instruments are priced.

Hedge funds