Valuation can help communicate performance to LPs Valuation can help communicate performance to LPs Submitted By James Williams | 24|05|2021 - 12:05pm In light of the recent scandals resulting from mispriced assets, and the broader impact of Covid-19 on the global economy, the need for accurate financial and valuation reporting in private markets where the underlying assets are largely illiquid and hard to value is a germane issue for investors. From a balance sheet perspective, the amount of debt a company is carrying needs to be transparent and accurate in order to help fund managers and investors determine the fair value ranges on the equity positions they hold. Once things start to deviate, from a valuation perspective, it can expose investors to potentially serious write-downs and subsequent liquidity issues. This was evidenced in the Neil Woodford episode in 2019, when, faced with investor withdrawals, he was unable to uphold the funds daily liquidity profile because of the portfolios exposure to hard-to-value unquoted companies.