Limited Partnerships

Limited partnership (LP) interests in hedge funds, private equity funds and venture capital funds conservatively represent almost $3 trillion in investments.

The “alternative investments” these funds invest in are often illiquid and, as such, are difficult to value. Yet accurate valuations are critical for several reasons:

• Compensation for the general partner (GP) is based on the value of the funds; either overpayment or underpayment could result if valuations are inaccurate.
• ASC 820 (FAS 157) sets forth the framework for “fair market” valuations; if valuations are inaccurate, they may be rejected during an audit.
• Alternative investments are not highly regulated; limited partners need assurances that their investments are worth what the GP says they’re worth.

LPs are often unable to redeem their interests for years. Having their assets valued by a third-party with in-depth knowledge of illiquid assets can provide the transparency needed to ensure them that their assets are being well managed.
For more information on our valuations of LP interests, contact Pluris today.