AIRAS for Hedge Funds

AIRAS for Private Equity Funds

 
The growth of “Alternative Investments” has changed the landscape of employee retirement funds, endowments, and foundations and has increased the exposure for fair valuing assets for both the auditors and the administrators of these plans. New Investment vehicles come to the market every year along with existing products like private equity funds, real estate funds and REITs, hedge funds as well as Funds of Funds to name a few.
 
The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820-10 brings a practical expedient to the valuation of assets at their fair value. Effective July 1, 2009 ASC 820 gave guidance on how entities should measure and disclose fair value in financial statement presentations.
 
In addition, due to a lack of transparency in many Alternative Investment Funds, it is not always clear that self-reported NAV based returns are proper and that NAVs are being reported at fair value. Axiom Valuation’s Alternative Investment Return Authentication Service (AIRAS) offers investors a cost-effective solution to ensuring properly reported returns. AIRAS enables investors and their auditors to be certain that Alternative Investment (AI) managers are not misreporting and what is reported is proper and meets the fair value standard.
 
AIRAS is a statistical detective tool using Modern Portfolio Theory designed to provide a level of confidence that AI reported returns and NAVs are being reported properly. AIRAS has pioneered the use of The Replicating Portfolio (TRP) methodology to value alternative investment interests when the manager does not disclose underlying assets.
 
AIRAS uses optimization and statistical methods to discover the underlying structure of an AI portfolio. Based on this, AIRAS develops a statistical-based metric, the confidence curve, which indicates the certainty that an AI fund return and NAV are reported properly.