Determine the right valuation frequency for your portfolio

There is no single appropriate cadence for every portfolio. The ideal frequency should reflect the fund structure, investor expectations, liquidity terms, redemption and subscription requirements, distribution platform requirements and the underlying assets.

Lincoln works with managers across a broad range of fund structures and asset classes to review valuation policies and establish a valuation cadence and approach tailored to their needs.

Adapt valuation frameworks to support increased frequency

Frequent valuations require appropriate calibration and refreshing each investment for fundamentals and market movements. For illiquid private assets, fundamental information is often available only quarterly or, in some cases, monthly. More-frequent valuations do not mean rebuilding every valuation from scratch. A quarter-end valuation can establish an anchor, with market data and company-specific developments used to refresh valuations between quarter-end valuation dates. Clear thresholds can identify when a material change requires deeper analysis or a new fundamental assessment.

Stay abreast of private market developments and strengthen portfolio monitoring

The quality of frequent valuations depends on staying abreast of relevant private market data, rather than simply marking to public benchmarks, which can introduce undue volatility and may not reflect how private market participants are transacting. Equally important is effective portfolio monitoring and information sharing between investment teams, portfolio companies and valuation teams to identify material developments as they occur.

Lincoln’s breadth across asset classes and geographies, combined with the significant volume of intra-quarter valuations we perform, allows us to continuously monitor market developments and incorporate relevant data points into valuations on a timely basis. Lincoln Lens further enhances this transparency, helping investors and managers understand what is driving changes in value and how changes in key assumptions may impact NAV. While our technology makes information sharing and monitoring scalable, our private market intelligence and valuation expertise make them meaningful.

Ensure data, information and governance can scale with frequency

Moving from quarterly to more frequent valuations requires technology, information-sharing, monitoring and review workflows designed to operate on tighter timelines. Legacy models and manual processes can be difficult to scale, increasing demands on headcount and resources. Managers also need timely review and committee oversight, consistency checks, segregation of duties and supporting documentation. While quarterly to monthly valuations is generally a manageable transition, especially with third-party support, daily valuations, in contrast, require an internal operating model switch in systems, monitoring and workflows.

This is where the combination of technology, standardized processes and valuation expertise becomes critical. Lincoln performs daily valuations for a wide array of clients, leveraging our technology-enabled platform and standardized workflows to automate repeatable market refreshes, portfolio monitoring and valuation updates, with multiple layers of review and oversight to maintain rigor and consistency at scale.

Determine the right resourcing model

Managers should assess whether the technology, data, valuation expertise and governance required for frequent valuations are best managed internally, co-sourced or outsourced. Partnering with Lincoln can offer greater scale and broader market intelligence while bringing an independent perspective that helps mitigate potential conflicts of interest. Beyond performing valuations, our secure client platform Lincoln Lens brings valuation results, portfolio monitoring, benchmarking and collaboration into one connected experience, providing managers with transparency and efficiencies as their valuation needs evolve.