The NAV, the whole NAV and nothing but the NAV…
| Nov 15th, 2009 | Filed under: Academic Research, Hedge Fund Operations and Risk Management, Today's Post | By: AAA Staff |
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In case you hadn’t noticed, transparency is all the rage. Risk-value statements and look-through trades, transactions signed sealed and confirmed kosher by an arm’s length third party are what investors at minimum demand of their hedge funds in the post-Madoff and post-meltdown world.
What they are also increasingly demanding are not quarterly, monthly or weekly, but daily NAVs – and even then not just a number pumped out by the hedge fund’s interns each day, but a genuine, cross-referenced, triple-checked, rubber-stamped NAV, with a cherry on top.
The demand among investors and their underlying managers for independently valued and accurately produced NAV has placed new pressure on administrators, who until last year handled the middle- and back-office operations of hedge funds in much the same way an accountant handles books: Sure the numbers are right, based on the information I was given and not under any obligation to verify. More…
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