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Alternative Market Briefing

Endowments offered tool to aid in rolling forward fair value in a portfolio of alternatives

Wednesday, July 13, 2011

amb
Dr. Stanley Jay Feldman
By Beverly Chandler, Opalesque London

This year’s annual meeting of the National Association of College and University Business Officers held in Tampa, Florida, USA this week saw Axiom Valuation launch a potential solution to the eternal problem for endowments of calculating fair value at calendar year end which can be particularly difficult for those invested in alternatives.

Founded in 1999, Axiom Valuation is a financial security and business valuation firm based in Wakefield, Massachusetts, USA. The company is a global leader in the development of analytical tools based on empirically-driven financial models for determining fair value.

Their new product, the Alternative Investment Return Authentication Service or AIRAS, is designed to deal with the "Alternative Investment Fair Value Roll Forward" problem facing many university endowments. Endowments are among the most heavily invested in hedge funds and private equity funds among institutional investor groups. As the company says, these alternative investments funds generally have a calendar year end, when they provide their investors with their audited values and returns." However, most endowments have a different fiscal year end than the calendar year end, and thus have to report their fiscal year end fair values of their alternative investments based on non-audited interim estimates from their fund managers. Endowment officers and their auditors have become increasingly concerned about this "Roll Forward" p......................

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