Question: How is the fair value of the Fund’s investments and investment liabilities determined?
Answer: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Fair value is a market-based measurement and therefore incorporates those factors that market participants would consider when pricing an investment or investment liability.
Quoted market prices are used to measure the fair value for investments traded in an active market, such as public equities and marketable bonds.
Where the market for an investment is not active, such as for private equity, private debt, real assets, and over-the-counter derivatives, fair value is determined by valuation techniques that make maximum use of inputs observed from markets, such as a multiple of earnings derived from a set of publicly traded comparable companies.
Additional techniques include the use of recent arm’s-length transactions, the current fair value of another investment that is substantially the same, discounted cash-flow analysis, pricing models and other accepted industry valuation methods.
For more information about our valuation practices, watch the video below: