Ryan McNelley and Monique Melis Quoted in PFM

In an article titled 'Coming from America' in Private Funds Management (PFM), Managing Directors Ryan McNelley and Monique Melis provide their views on The Securities and Exchange Commission (SEC)'s newly tightened approach to valuation best practice and the potential impact in Europe. 

Ryan McNelley, Managing Director in the Portfolio Valuation practice, commented, “Six years ago the Securities and Exchange Commission wasn’t sophisticated enough to interrogate methodologies. That’s changed now; they have significantly improved their staff capabilities and can assess whether the method is appropriate.”

Stressing the importance of independent valuations, Ryan continued, "Fund managers are extremely good at what they do. But they don’t necessarily have the training to know what investors, regulators and other stakeholders require with respect to establishing a truly objective and independent valuation framework. Whilst there may be a GP who understands the valuation method, implementation may be shaky. Despite their good intent, they can fall into traps.”

Monique Melis, Global Head of the Regulatory Consulting practice, said, “Unless the European regulator puts some pressure on the industry, the standards will vary from manager to manager. Regulatory pressure and oversight is really the only way to give a hard push on enforcing valuation or any standards. This is a common discussion point among due diligence professionals globally.” 

Subscribers of PFM can read the full article on PFM's website.