The retailization of private market investments is driving demand for more frequent valuations. VRC has been at the forefront of this trend, combining its deep experience in private investment valuation services with rigorous internal governance and active engagement with clients, standard-setters, and regulators to help shape best practices for daily valuations.

In this Q&A, VRC’s Portfolio Valuation Services practice group leaders, John Czapla, Parag Patel, and Shane Newell, share their expertise in providing daily valuation support across multiple asset classes, including private debt, private equity, asset-based finance, structured products, and real assets.

Q. Does VRC support daily valuation requirements?

A. Yes, VRC supports daily valuation processes for its clients by providing a valuation recommendation or a range of values in accordance with client governance frameworks. Drawing on more than five decades of 100% focused valuation expertise, VRC has provided portfolio valuation services since the early 2000s, with the valuation frequency evolving alongside market needs—from annual to semi-annual, quarterly, and monthly cycles, and now to daily. Today, we support daily valuation requirements for a growing set of funds through our broader portfolio valuation platform.

Q. What is driving the trend to more frequent valuations?

A. Historically, private market investments were accessible to institutional investors through long-term, closed-end private funds. Today, new semi-liquid, open-ended fund structures are broadening investor access and offering more frequent subscription and redemption terms. Semi-liquid, open-end fund structures, such as interval funds, blend liquid investments and private assets in a single, more accessible vehicle that can issue shares continuously and offers periodic, limited redemptions at the fund’s net asset value (NAV), giving it a “semi‑liquid” classification. As a result, valuation cadence is shifting from the traditional quarterly cycle used by closed-end private funds to a monthly cycle to align with fund subscription cycles, with growing demand for daily valuations to support daily subscriptions.

Q. Which fund structures are leading the adoption of daily valuations?

A. While the strongest demand is from interval funds, we also see increasing interest from mutual funds and ETFs for independent valuation to support daily NAV calculations as they increase their allocations to illiquid assets within SEC limits.

Q. What drives some funds to rely on monthly valuations, while others move to a daily valuation process?

A. Several factors are prompting the shift from monthly to daily valuation cycles, including subscription and redemption windows, rising investor expectations, and distribution platform requirements. Interval funds historically aligned valuation frequency with their subscription and redemption windows (quarterly or monthly). The move to a daily subscription model has accelerated the move to daily valuation.

Both retail and institutional investors now expect greater transparency around governance, conflicts of interest, and valuation practices. To meet these expectations and stay competitive, fund sponsors are adopting more frequent valuation cycles and leveraging third-party valuation providers.

Lastly, fund advisers rely more heavily on distribution platforms to reach retail investors. As fiduciaries, these distribution platforms require more frequent, independent third-party valuations.

Q. Are daily valuations done internally or outsourced to third-party providers?

A. Most clients choose to outsource daily valuations of illiquid and hard-to-value assets to third-party providers due to increased scrutiny from auditors, regulators, and investors, as well as resource constraints. Independent valuation specialists do more than support financial reporting values. External specialists help ensure that valuation practices align with evolving legal and regulatory standards, reduce compliance risks, and reassure investors that fund values reflect the relative fundamental and market factors of underlying investments, especially in volatile or opaque markets.

The volume of illiquid assets and the demands of daily valuation can quickly exceed internal team capacity, and many in-house teams may lack the specialized expertise required for private-market asset valuations.

It is important to emphasize that using a third-party valuation provider does not remove the fund’s oversight accountability. The fund’s board retains ultimate responsibility for oversight of the valuation process, regulatory compliance, and the determination of fair value.

Q. What is VRC’s methodology for performing daily valuations?

A. Daily valuations use the same disciplined framework as VRC’s quarterly and monthly processes, adapted for increased frequency and information availability. Clients provide the relevant legal documents and key details for each security to be valued. Each month, VRC applies its standard valuation methodologies to set an anchor point that is tracked against relevant public benchmarks and comparable companies throughout the month. A beta statistic is developed based on the historical price relationship between a selected public benchmark and private asset value changes and is used to provide valuation recommendations for the subject private assets. Materiality thresholds and moving averages may also be applied to smooth single-day, non-systematic volatility.

This process ensures valuations remain responsive to material market movements while preserving analytical judgment and consistency. This is a collaborative effort between VRC and its clients, who are responsible for notifying VRC of any material developments that could affect intra-month valuation conclusions. When such situations arise, VRC performs an ad-hoc valuation, including fundamental updates.

Q. Does VRC’s daily valuation processes introduce additional volatility for illiquid investments?

A. Not necessarily. While public market data can inform daily valuation processes, illiquid asset values should not simply track exchange-market volatility, as the two markets differ significantly in price discovery, liquidity, transparency, and valuation methodologies. As a result, private assets typically exhibit lower price volatility than public assets. Accordingly, VRC’s approach is designed to capture material market movements while filtering short-term noise that does not reflect how market participants value private assets. By calibrating market sensitivity and applying disciplined judgment, daily valuation recommendations remain responsive during periods of market stress without introducing unnecessary volatility in more stable conditions.

Q. What turnaround timelines do clients typically expect for daily valuation recommendations?

A. Most clients request daily valuation recommendations shortly after market close, using prior-day market data, depending on the clients’ internal processes and operations, governance structures, and review requirements. VRC also provides timely ad-hoc valuation updates at a client’s request based on new material information or significant changes in market conditions.

Q. What should clients consider when transitioning to a daily valuation process?

A. Clients considering a transition to daily valuations should focus on three areas:

• Process scalability: Daily valuation places new demands on overall operations. Clients should review their existing valuation processes, including timing, governance, IT systems, and human capital, to determine whether they can be scaled to meet the demands of daily valuations. This assessment helps establish reasonable expectations for the transition schedule.
• Information flow: A successful daily valuation process depends on timely, consistent information from investment teams. Clear expectations around cadence and responsiveness are critical to ensuring valuation recommendations remain current and accurate.
• Organizational alignment: Top-down alignment and buy-in from the board, senior fund management, and investment teams are essential to support the daily valuation process. Leadership engagement reinforces accountability, prioritizes timeliness, and enables effective team coordination.

Q. How quickly can a portfolio transition from periodic to daily valuations?

A. For existing clients, transitioning from periodic to daily valuation processes can often be implemented efficiently, given that established valuation baselines already exist. For new clients, timelines depend on portfolio size and complexity, client data readiness for daily reporting, and their governance structures.

Q. How does VRC manage scale and consistency in a daily valuation environment?

A. To support the scale and frequency of daily valuations, VRC combines its dedicated Portfolio Valuation team, which represents one of the market’s largest practice groups, with our proprietary, purpose-built valuation technology infrastructure. This combination enables VRC to manage volume and frequency efficiently while maintaining the independence, consistency, and quality clients expect from an established valuation firm. To ensure consistency, VRC has created a daily valuation committee that aligns our methodology to professional standards and best practices. VRC does not outsource any of our valuation work.

Q. How does VRC see demand for daily valuation evolving?

A. VRC anticipates the demand for daily valuations of hard-to-value assets to rise with the growth of semi-liquid fund structures and as mutual funds and ETFs further increase their allocations to illiquid assets. As adoption increases, effective execution will depend on disciplined governance, experienced valuation judgment, and scalable infrastructure. VRC remains committed to supporting daily valuation needs where they are appropriate and enhance a fund’s reporting framework.

Q. How does VRC differentiate its approach to daily valuations?

A. VRC is 100% valuation focused with more than 50 years of experience serving the global investment community. Our client-first approach delivers independent, defensible valuation recommendations that reflect market conditions in both stable and rapidly changing environments. VRC combines technology with sound professional judgment to ensure supportable market-based valuations. With one of the largest dedicated Portfolio Valuation teams in the market, we are uniquely positioned to support evolving valuation requirements, from periodic reporting to daily valuation needs, while remaining fully focused on independence, quality, and integrity.

Speak with a valuation professional about your daily valuation needs.