...I did quite a bit of reading before selecting the Pluris DLOM Database.

Keith Sellers
University of North Alabama

Hedge Funds

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Under the cost approach, the starting point for the valuation is the net asset value (NAV) of the fund at, or near, the valuation date. But depending on liquidity terms (lockups and liquidity windows), it may take the investor a significant amount of time to redeem and realize the NAV of his interest. For this reason, valuation discounts may be appropriate. There is significantly secondary market trading in hedge fund limited partner interests, including "gated" funds. Pluris provides hedge fund LP valuations for investors in a wide range of situations and relies on the best available research in each case.

Pluris also provides valuations of the promoted, or "carried interest" typically held by the general partner of the fund. The GP carry value is valued using a number of methods under the income approach to value, depending on the circumstances of the fund, the position relative to its high water mark, the growth trajectory and results of the fund, and stage of the fund.