Current market conditions feed SEC reviews of valuation practices (FundFire)

Valuation practices are coming under even greater scrutiny by the SEC. Pandemic related economic conditions have the SEC looking closely at real estate managers, among other private fund advisers, and seeking information about their valuations process. FrontLine’s Founder and President, Amy Lynch, comments that ongoing, routine examinations of these firms – now occurring during an economic downturn – have made reviews of valuations and compliance to policies and procedures a targeted area and priority for the regulator. Ms Lynch also explains that regulators are looking beyond the valuations process to see how it affects other elements, such as internal rate of return calculations. She expects to see valuation practices on the SEC’s 2021 priorities letter, to be issued later in 2020 or early next year. See FundFire (subscription required), “SEC to Sharpen Scrutiny on How Managers Bake Valuations”