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�鶹ֱ�� & Lardner LLP partner James Lundy was featured in a recent Securities Docket , outlining how funds can support and defend valuation judgments through active committee oversight, thorough documentation, and independent review of third-party analyses.

“When regulators come knocking, the first thing they want to understand is who was actually driving the valuation of illiquid assets.” He explained that the strongest defense is a valuation committee with “clear, active ownership of every material valuation judgment,” evident in comprehensive documentation.

Lundy continued, “Document the reasoning, not just the result. A defensible valuation is one where you can reconstruct why the valuation committee landed where it did.”

Additionally, he advised judicious use of outside valuation consultants, cautioning, “The committee needs to conduct its own independent analysis, critically evaluate the consultant’s work, and reach its own supportable conclusions.”