Press Room: Article

February 22, 2010

The Fair Market Value of Alternative Investments

Alternative investments include a variety of different asset classes, such as hedge funds, private equity funds, limited partnerships, venture capital funds and funds of funds.

The increasing use of alternative investments as an asset class within Family Limited Partnerships (FLPs) has drawn attention to the challenge of determining a fair, market-based value for an asset which essentially does not have an active market and thus impacts the value of the FLP. Simply relying on reported pro-rata Net Asset Value (NAV) may not be appropriate, as the fair value of the investment may be materially less. …

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