The Alternative Investment Management Association, the global hedge fund and alternative investment industry association, has issued a new Guide to Sound Practices for Hedge Fund Valuation.
The guide, which builds on the research on asset pricing released by Aima two years ago, includes 15 recommendations on sound practices for hedge fund governance, transparency, processes and methodology as they relate to the valuation of hedge fund portfolios. It includes further discussion and information around each recommendation.
While recognising that a one size fits all approach is not appropriate for hedge funds, the guide seeks to provide practical direction with working examples for each recommendation. It includes a template for a hedge fund valuation policy document.
Says Aima director Emma Mugridge: 'The hedge fund industry is committed to increasing transparency of its activities. This guide will enable investors, regulators, governmental agencies and fund trustees/directors to deepen their knowledge of hedge fund valuation and to adopt the sound practice recommendations where appropriate. This is yet another indicator of the importance the hedge fund industry attaches to principles-based good governance.'
The 72-page guide is the work of a committee representing a wide range of industry practitioners, and is designed for use by the global hedge fund industry and those involved in its activities.
It is expected that there will be keen interest from hedge fund managers, many of whom have already worked with other stakeholders to establish valuation practices, which they can now benchmark against Aima's recommendations.
Aima has more than 1,100 corporate members in 46 countries worldwide including hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting services, fund administrators and information providers.