July 4, 2020

Hedge fund valuation practices under scrutiny


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08_june_Paladyne_Systems_Hedge_fund_Portfolio_Pricing_image002From Risk

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, who was speaking on a panel at the GaimOps conference in the Cayman Islands.

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