Administrator Transparency Reporting
As part of due diligence on alternative investment funds, institutional investors require independent verification of the net asset value, the pricing sources used and the diversification and quality of counterparties.
This due diligence helps address investor concerns on misappropriation of funds, strength valuation processes and evaluate counterparty risk. The ATR is a tool for investors to better understand these specific risk factors and focus their conversations with asset managers on the relevant risks.
Examples of issues that the ATR can help flag during due diligence include:
- Significant exposures to a single counterparty
- Increasing levels of less liquid assets
- Increasing number of assets being priced by the asset manager
- Changes in the amount of assets and liabilities that have not been independently verified
The ATR provides transparency on the fund’s net asset value, confirmation of the fund’s assets and liabilities, verification of pricing sources, counterparty exposures, fair value hierarchy, and (optionally) related party co-investment in the fund.