Private fund managers are currently experiencing a range
of legal issues affecting their funds as a result of COVID-19. In
this feature, we focus on the challenges being faced with
valuations of alternative investment portfolios, and the impact
that valuations and liquidity considerations may have on capital
calls from investors, and on redemptions from open-end funds. What
should managers be doing now to manage and address these
issues?
Valuations
With growing volatility and uncertainty stemming from the
COVID-19 pandemic, private fund managers of alternative investments
will need to consider the approach to be taken regarding fund and
asset valuations, the degree of flexibility they have to depart
from their historical approach, and whether they have an obligation
to their investors to take a different approach. They will also
come under increasing pressure from investors to act quickly and
responsively in assessing these matters. The terms of the fund
documents
