The 16th edition of Deloitte fair valuation pricing survey explores innovation in valuation

To fund companies, valuation impacts more than the net asset value of fund products. The risk appetite and how effective the internal control is with the company will directly impact how it sets up the valuation process and the quality of results generated in the valuation process. This report shows that the valuation capability is as important as research capabilities to fund companies. Among other things, the report discusses the fund liquidity risks, potential conflict of interests and management bias in valuation. We believe these are worth the attention of the board-level risk committee members, C-suit executives, and risk and operations executives in the investment management sector. Highlights of the survey are set out below:

Applying innovative technologies in the valuation process

• Reasons why fund companies invest in emerging technologies
• Which emerging technologies are being applied

Liquidity issues in valuation

• Impact of the SEC liquidity regulatory requirements on the fund valuation process

Innovation in management

• How do the management and governance boards improve productivity with the innovative technologies powered by big data?
• How to innovate the data and information aggregation for the management and governance boards of the fund companies?
• What are the regulatory trends coping with the conflict of interests in the valuation process?

Mindful of the risks of innovation

• How should fund companies address risks associated with the use of the third-party data, outsourced service providers, and emerging technologies in the innovative valuation process?

Risks from relying on external agencies

• Current reliance on third- and fourth-party service providers by the fund companies
• How do fund companies evaluate fourth parties and valuation data they provide?