The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Carne Launches Hedge and Traditional Fund Valuation Best Practices Product

Fund management advisory firm Carne Global Financial Services has launched its Hedge & Traditional Fund Valuation ‘Best Practice’ Product, which is aimed at assisting hedge fund, private wealth and traditional asset managers in following valuation best practice across all asset classes and products.

Carne Global claims that these best practices will help fund managers to deal with increasing risk and complexity of the valuation process, particularly with complex and illiquid instruments. It is a tool for improving transparency in fund governance, says the advisory firm, and it encompasses valuation policy, terms of reference for valuation committees and marketing summaries.

Sunil Chadda, head of alternative investments at Carne Global, explains: “The high levels of innovation in the hedge fund industry, and the continuing search for alpha across different asset and instrument classes, mean that the challenge of valuation is only going to increase. Carne’s Hedge & Traditional Fund Valuation ‘Best Practice’ product goes a long way to simplifying the process and improving controls and transparency – issues of critical importance to investors and the continuing development of the industry.”

The product incorporates the recommendations of the UK’s Hedge Fund Working Group (HFWG)/Hedge Funds Standards Board (HFSB) and the US President’s Working Group, the European Funds and Asset Management Association (EFAMA), the International Organisation of Securities Commissions (IOSCO) and accounting standard FAS 157. Once the product and any subsequent recommendations have been implemented, managers will be able to claim compliance with the HFWG recommendations on valuation, Carne Global says.

The valuation product focuses on either a specific fund or the manager’s entire fund range and analyses the holdings and the key risks involved, with an emphasis on complex and illiquid instruments. It documents how the administrator and manager each price the portfolio, as well as how and where counterparty, prime broker and third party prices are used, while also addressing issues around side pockets.

Carne Global’s product is aimed at allowing the clear identification of pricing roles, responsibilities and segregation and the identification of pricing sources. It also includes the identification of levels of price validation and tolerances, as well as of pricing weaknesses and associated mitigations. It defines controls and reporting procedures and allows for the reporting to asset manager valuation committees and boards.

Related content

WEBINAR

Recorded Webinar: A new way of collaborating with data

Digital transformation in the financial services sector has raised many questions around data, including the cost and volume of reference data required by each financial institution. Firms want to pick and choose the reference data they need to fulfil their requirements. Emerging solutions with the potential to decrease the cost of data and increase flexibility...

BLOG

Derivatives Service Bureau Calls for Reference Data Provider to Support UPI

The Derivatives Service Bureau (DSB) has released a Request for Information (RFI) to identify a reference data provider for underlier identifiers for the Unique Product Identifier (UPI). A requirement of the UPI, which the DSB plans to make available in Q3 2022, is to support the use of multiple underlier identifiers and reference data elements....

EVENT

RegTech Summit New York City

Now in its 5th year, the RegTech Summit in NYC explores how the North American financial services industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Corporate Actions Europe 2010

The European corporate actions market could be the stage of some pretty heavy duty discussions regarding standards going forward, particularly with regards to the adoption of both XBRL tagging and ISO 20022 messaging. The region’s issuer community, for one, is not going to be easy to convince of the benefits of XBRL tags, given the...