Valuation Practices for Registered Investment Companies Holding Private and Hard-to-value Assets

Registered investment companies are increasingly investing in private, illiquid, and bespoke assets that do not have readily available market prices and therefore can present heightened valuation challenges. In this article, the authors review the statutory and regulatory framework for fair valuation of assets under the Investment Company Act of 1940, discuss related accounting, governance and disclosure practices, and comment on recent areas of focus for Securities and Exchange Commission examinations of registered investment companies relevant to valuation.