Funds need to be able to use judgment, and a range of methodologies to value illiquid assets
Washington, D.C. — MFA encouraged the International Organization of Securities Commissions (IOSCO) to create flexible, principles-based valuation standards for private funds in a comment letter submitted today. The letter responds to IOSCO’s consultation on Valuing Collective Investment Schemes, which seeks to update global valuation standards.
“Accurate valuations are critical to market integrity and investor protection,” said Jillien Flores, MFA Chief Advocacy Officer. “Private fund managers maintain strong valuation controls, including for infrequently traded assets, that are grounded in global accounting standards and established regulatory regimes. The updated standards should aim to provide funds the flexibility they need to pursue diverse investment strategies, ensure valuations remain accurate, and maintain consistent approaches across jurisdictions.”
Private funds operate under rigorous valuation frameworks, adhere to strict fiduciary obligations, and rely on data from independent pricing services and others. These funds are typically closed-end, limit investor redemptions through contractual terms, and invest in assets that trade infrequently or are bespoke. Accurate valuation depends on judgment, proportional governance, and methodologies tailored to the underlying investments, rather than one-size-fits-all prescriptive requirements.
The final IOSCO report should clearly distinguish between open-end funds and private funds. Applying IOSCO’s recommendations as formal standards for open-end funds and as optional good practices for private funds will avoid unnecessary duplication and ensure the framework works across different fund structures and jurisdictions.
Read the full letter here.
###
About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
