Annual fair valuation pricing survey

Introducing the 15th edition of our hallmark survey

What factors are impacting investment managers' valuation practices? Explore how mutual fund executives are honing their valuation practices through Deloitte's annual survey.​

Fair valuation pricing survey

Introducing the 15th edition

Last year's survey found managers dealing with a stock exchange shutdown and the Brexit vote. This year's roster of issues included the political uncertainty associated with the 2016 US presidential election, the economic impact of serial hurricanes across the Caribbean and the southern US, and the regulatory environment given the new leadership in the SEC.

Beyond the headlines, investment managers continue to face valuation issues that they need to consider. The reality is the industry is working to adapt to regulatory change—reporting modernization and liquidity rules are consuming time for accounting, operations, risk, and compliance personnel, along with industry service providers.

Conducted between July and August 2017, the 15th edition of our fair valuation pricing survey reveals that investment managers did not sit still during this period of market calm. Many took the opportunity to enhance their governance process and consider automation opportunities.

Three focal points of activity

Among the issues at play in the industry today, the survey finds these three, in particular, the subjects of rising activity:

  • Private equity valuation. No matter how much exposure to private equity investments a manager has, estimating their value remains a challenge—and a concern for more than half our respondents. Calibration according to GAAP can be a useful tool, but few industry practices are set in stone.
  • Odd-lot valuation. Before valuing odd-lots, managers need a consistent system for defining and identifying them. Then they need some basis in data for valuing such an asset differently from the way they would value a round-lot. Almost half the survey respondents have performed analyses to determine if odd-lots should be valued at an amount different than the price used for a round-lot. And almost a quarter have changed their policies on odd-lots.
  • Consideration of pricing vendors. Every year, investment companies say they're willing to re-evaluate their pricing sources. With recent merger activity among those vendors, that practice may accelerate. This year's survey finds significantly more companies are adding or changing their secondary pricing sources.

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Investment valuation and governance: Industry trends and benchmarking

Stepping up management practices

This year's survey brought to light some other notable findings relating to valuation policies and procedures, board governance, and specific investment types. In regards to board governance, this year's survey revealed that more firms are investing in risk valuation dashboards and that it has become more common for members of the board to receive information on price challenges. And when it comes to overall management, just under two-thirds of those surveyed said their companies have a specific employee responsible for managing and overseeing the valuation process. These findings and others are detailed in the survey executive summary.

Download the 15th edition of our fair valuation pricing survey.

Looking ahead

Investment companies continue to focus on having the right people and processes in place to achieve their best estimates of fair value for each investment and their shareholders. Over the coming year, finding new ways to meet objectives, governance matters, understanding the nuances of available investments, implications of new regulation, and industry challenges—including increased technology capabilities—are areas of particular focus for investment companies.

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Deloitte’s fair valuation pricing survey

Regulators, standard-setting bodies, and accounting and valuation professionals have stepped up their efforts to ensure higher quality valuations. But in a world rife with change—and an industry marked by increasing complexity— understanding and addressing the various aspects of estimating and auditing fair value measurements is a growing challenge.

Deloitte's annual fair valuation pricing survey taps the expertise and insights of mutual fund investment management leaders from across the industry to gain a better understanding of the current valuation landscape. It aggregates the views of more than 85 mutual fund firms with a total of more than $5 trillion assets under management. The population of survey participants represents a diverse mix of mutual fund firms encompassing various sizes, asset classes, and geographies.

Past surveys

While each year's survey report highlights significant year-to-year changes, readers can make their own comparisons by reviewing past surveys in full.

14th edition

13th edition

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