Fair value is not an abstract accounting exercise. It is a practical tool for investor protection and decision-making. In Asia today, with fundraising cycles lengthening and audits tightening, LPs are testing whether managers’ numbers stand up to scrutiny.
For asset owners, from pensions and insurers to banks and corporates, the question is simple: does today’s valuation help me manage risk, allocate capital and communicate clearly?
For managers, this requires moving beyond a “manager’s mark” mindset. Investors increasingly expect valuation processes that minimise discretion, separate duties between deal teams and valuation oversight, and evidence external challenge where appropriate. Advisory boards are asking sharper questions. Many global LPs favour independent inputs or third-party reviews to remove conflicts and drive consistency across portfolios.
Why now in Asia? Fundraising cycles have lengthened, audits are probing methodology and data provenance, and cross-border investors compare outcomes across jurisdictions. Japan’s market is also shifting: international allocators increasingly expect fair value as standard, not a nice-to-have. In this context, the objective is alignment: a valuation approach that investors trust because it is explainable, repeatable and evidence-based.
A pragmatic framework helps:
- Governance: clear separation of origination and valuation oversight; documented challenge and sign-off
- Methodology: consistent techniques (market, income, cost) with rationale for selection and key assumptions
- Evidence: multiple sources, audit trails, and direct company data validated where possible
- Materiality and frequency: focus effort where it changes decisions; refresh in line with risk and liquidity
- Communication: translate methods and outcomes into investor-relevant insights (risk, runway, cash, progress to value-creation plan)
For GPs, fair value done well reduces friction in audits and LP conversations, shortens diligence cycles and strengthens credibility in a competitive fundraising environment. For LPs, it supports asset-liability management and comparability across managers.
At Langham Hall, we help managers design and operate valuation and reporting processes that meet international expectations while remaining practical for Asian portfolios.
