| SECURITIES VALUATION FOR COMPLIANCE & SELECTION |
Minnesota Business Valuation Group's Fund Valuation Compliance assists portfolio managers and fund compliance officers in obtaining updated appraisals of portfolio holdings. Recent changes and discussions of changes by the Securities & Exchange Commission and the Financial Accounting Standards Board are creating new demands on those engaged in hedge fund, pension fund, and other portfolio management activity.
MBVG's Fund Valuation Compliance has developed a semi-automated process for valuing discrete portfolio holdings and also addressing general portfolio risk from the perspective of an external, independent, certified expert, thus substantially reducing your fund's potential exposure from investors and regulators. Leading this effort is Rawley Thomas, MBVG Affiliate and President of Life Cycle Returns (LCRT).
Fund Valuation Compliance has developed a semi automated process to evaluate the multiple equity holdings of funds. (See Publications for more information and download a paper which contains additional explanation.) Valuation is a well- established and tested process. There is a broad body of knowledge which has been developed by those engaged in the industry and through court cases which have now set some important precedents. The few systems which have made recent offerings fail to address these important requirements.
Fund Valuation Compliance has assembled a series of processes which provide values using the income approach, the market approach, and the asset-based approach. The strongest elements to value a going concern's equity requires a focus on the income approach and the market-based approach. The asset-based approach is frequently used in the case of going concerns only for a reasonableness test of the other values obtained.
Keeping in mind the intent of the Appraisal Foundation in setting standards for the Uniform Standards of Professional Appraisal Practice (USPAP), Fund Valuation Compliance has worked to assemble strong semi-automated processes to determine value for these discrete approaches. A certified professional then reviews and reconciles differences between the findings, examining what may cause the differences. This means that there is less analyst intervention, but a sufficient amount of professional review to ascertain that results are realistic.
The primary engine driving the Fund Compliance valuation process is the proprietary platform developed by Life Cycle Returns. Using this platform also offers the means to dramatically assist portfolio managers in security selection at a much more economic price than additional analysis would require, and with available backtesting to verify the methodology. Michael Choniski, with a background at the Boston Consulting Group, is well-versed in both the compliance application as well as the application for use as a security selection tool. At the Life Cyle Returns site, LCRT discusses ValuFocus, a vehicle for minimal training before rapid implementation and demonstrable returns.
No appraisal process stands without the chance of challenge, and the final opinion of all work remains within the decision-making of the fund compliance and legal department. Yet when compared to other methods, products, or services which are now available to meet these new requirements, the Minnesota Business Valuation Group believes it offers much more robust and much more cost effective methods than the other available alternatives.
Contact us with any questions you may have by emailing Randall Schostag. Or call him at 612.240.0309 or 800.303.2889. We look forward to talking to you.
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