Hedge FundAdviser

Hedge FundAdviser, provides news and analysis from Grant Thornton’s hedge fund practice. Published quarterly, this newsletter delivers timely and relevant thought leadership on key hedge fund issues.

In this latest issue, Illiquid assets: Improving transparency for investors, Justin Burchett, PhD, Valuation specialist, Economic Advisory Services, discusses illiquid assets and how funds can attract investors by providing additional transparency.

Many hedge fund investors suffered significant losses in the downturn and consequently want a closer view of portfolio assets and valuation process when it comes to illiquid assets. Because of the lack of observable transaction prices, illiquid assets are often valued using models that may include significant management judgment. This issue explores how funds that invest in illiquid assets can demonstrate transparency and a commitment to clear valuation policies to investors:

• Upfront due diligence
• Appropriate lock-up periods
• Valuation policies and procedures with an independent third-party review
• Additional disclosures beyond what may be required by GAAP.
  
  

You can also listen to a playback of a related webcast, Illiquid assets: Defining and assessing the risks to investors. Search for course archive: 21607.