NEWS & UPDATES
April 2008 (Chicago/Washington, DC)Treasury Secretary Henry M. Paulson, who chairs the President’s Working Group (PWG”), announced today that the release of the Best Practices for the Hedge Fund Industry is coming “at the height of robust discussions about the need for market discipline. Paulson further remarked that “as these best practices are adopted by market participants, we are taking further steps to support the process of normalizing our financial markets today and to protect against future systemic risk.”
The PWG, which includes the heads of the U.S. Treasury Department, the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Commission, tasked two private sector committees comprised of experienced and well-respected industry members to develop a set of best practices. The result was the release of two distinct yet corresponding reports: the Best Practices for Asset Managers and the Best Practices for Investors. These reports offer guidelines and principles for valuation, risk management, compliance, and conflicts of interest. Specifically, they emphasize the need for comprehensive valuation procedures that include the use of independent valuation professionals, thorough written policies, establishment of valuation committees, oversight and other measures for the valuation of assets, particularly with regard to hard-to-value and illiquid assets.
"We believe that the timing of the Best Practices study could not have been better. As independent valuation specialists, we witness the inconsistency in the application of fair value measurement on a daily basis and feel that this guidance will reduce the overall lack of transparency in the Hedge Fund industry."
--Karl D’Cunha, Senior Vice President, Houlihan Smith & Company, Inc.
HOULIHAN SMITH & COMPANY, INC. is a leading provider of investment banking and valuation services to the hedge fund industry. Houlihan’s dedicated team of hedge fund valuation professionals incorporate proprietary quantitative models and that reflect the current best practices in the industry. Established in 1996, Houlihan is a registered broker-dealer and FINRA member committed to the highest levels of professional standards. The Houlihan name is synonymous with valuation and deal making expertise, leveraging years of experience, reputation and relationships. Additional information is available at www.hedgefundvaluation.com
For more information regarding Hedge Fund Services, please contact, Karl D’Cunha at 312.499.5900 or e-mail kdkunha@houlihansmith.com