Elevated regulatory scrutiny of securities valuations, risk management controls and reporting requirements, coupled with recent SEC enforcement actions are prompting private funds to look for ways to keep track of, and satisfy, overlapping disclosure and regulatory reporting mandates. The need for tighter valuation controls in particular is a priority of concern for private funds looking to manage risk by having better data to judge the market value of complex and less liquid assets in their portfolio.
Many hedge funds have previously relied on internal pricing models, or marks from a single pricing vendor to assess the market value of less liquid assets on their balance sheet. But, unreliable, or conflicting, valuations can expose fund managers to doubts from regulators and investors. Moreover, funds are starting to see how effective valuation controls can give funds confidence to invest in instruments that trade in a dynamic and opaque market.
To meet the growing demand for information on this topic, public accounting firms, such as KPMG LLP are conducting research and supporting dialogue about how current valuation matters affect companies, investors, and regulators. Michael Athanason, the U.S. Leader for Alternative Investment Valuation Services at KPMG LLP says, “Beyond reliance on only traditional broker quotes, third-party valuations can give private funds more confidence in their valuations for reporting and strategy purposes. In the long-term funds can also benefit from adopting better information governance practices, which can help funds meet future regulatory mandates and investor demands.”
On May 28, Bloomberg will host representatives from the SEC, KPMG, and other industry leaders for a discussion on leading practices of effective valuation and disclosure policies as well as regulatory data management systems supporting compliance and financial reporting requirements. Cynthia Sachs, who leads Bloomberg’s valuation service, or BVAL, will join the conversation about the need for objective, independent and transparent evaluation capabilities for both traditional and hard-to-price assets. The conversations will also cover:
– The need for effective valuation and disclosure policies to meet expanding reporting requirements, such as CPO-PQR, Dodd-Frank, Reg. ADV, Form PF and AIFMD Annex IV.
– The policies and technologies private funds are leveraging to support disclosure and reporting processes.
– SEC valuation control and independence expectations for investment advisers.
Fund managers want to understand how regulatory requirements and investor demands will impact their long-term business strategy. Our event convenes some of the best minds in the industry to discuss information governance practices that will help private funds implement proactive and effective valuation control strategies.
If you would like to attend this event on May 28, please register here: http://pages.connect.e-bloomberg.com/valuationcontrol/.
This event is intended for Bloomberg clients and investment, compliance and risk management professionals at private funds. It is not open to the media.