As recent market events surrounding the COVID-19 pandemic have
reminded us, markets can change quickly. This volatility enhances
the need to assess the timeliness and applicability of information
used to estimate fair value. For investments deemed not active but
valued using observable inputs (so called Level II inputs)
additional scrutiny is needed in times of market dislocation. In
particular, broker quotes and transaction data must be assessed in
the context of the broader market environment and the unique
circumstances surrounding each quote, transaction and price.
In March 2020, transaction data in the over the counter and
private markets became less readily available, and new issuances in
many asset classes has slowed or ceased entirely. Compounding this
challenge, the credibility of observed market information has
become harder to validate. As secondary market transactions become
less frequent and market participants deal with forced selling due
to capital or
