Valuation issues stress relationship between hedge fund managers and investors

The valuation of hedge fund assets has become an issue fraught with tension. Fund administrators say they are up to the task. Fund managers believe they alone have the knowledge needed.

The financial crisis revealed the extent to which reliable valuation underpins the investment world. As a result valuation of hedge fund assets has become a key focus area and the use of independent verification continues to increase.

With this greater focus on independent views, different concerns have been raised. The main worry is how investors can ensure they are getting fair value even when a third-party valuer is involved, particularly on esoteric assets, without undermining the reasons for