Private Markets Are Speeding Up. Valuation Has to Keep Pace

If it were practical and cost-effective to independently value every private asset every day, most investors would welcome it. Valuing an illiquid asset properly requires information, expertise and judgment and for many years the cost and operational complexity of doing so meant independent valuations were undertaken relatively infrequently.

That has changed significantly over the past two decades.

Technology, better access to data and increasingly sophisticated valuation infrastructure have made the process more efficient, while private markets themselves have grown substantially in scale and complexity. As a result, valuations can be carried out more frequently and efficiently than was possible 20 years ago. At the same time, investors, managers and regulators increasingly expect valuations to reflect changing circumstances.

Liquidity is Driving Greater Frequency

One of the most significant developments over the past few years has been the growth of semi-liquid and evergreen structures. Where a fund offers monthly subscriptions or redemptions, there is a strong argument that the valuation frequency of its underlying assets should match that liquidity frequency. We are seeing this increasingly become accepted practice, particularly in the U.S., where managers have been launching significant numbers of semi-liquid vehicles.

Across Kroll’s portfolio valuation work, monthly valuations accounted for around 11% of valuation activity in 2024, rising to approximately 25% in 2025 and remaining at around 22% in the first quarter of 2026. The trend toward greater frequency is increasingly relevant globally as semi-liquid structures develop.

The same pressure can also reach traditional closed-ended funds. A closed-ended private markets vehicle may itself be held within an open-ended fund-of-funds structure, for example, creating a liquidity requirement higher up the chain and consequently greater demand for timely valuations of the underlying assets. As private markets evolve and become accessible, the traditional distinction between liquid and illiquid investment vehicles is becoming more nuanced.

Managing the Risk of Stale Valuations

Much of the discussion about valuation risk in private markets focuses on conflicts of interest, overly optimistic assumptions or, in more extreme circumstances, misconduct. In practice, however, one of the most important risks is considerably more straightforward: information becoming stale.

A company may breach a covenant, experience a deterioration in trading or be affected by a significant market event, and the valuation process needs to capture that information within an appropriate timeframe.

This becomes particularly important when investors can subscribe or redeem from a vehicle. If material information has not been reflected in the valuation, an investor can enter or leave at a price that does not adequately reflect the value of the underlying portfolio. This can happen even when everyone is acting in good faith. More frequent valuation therefore needs to be accompanied by processes that ensure relevant information reaches the valuation quickly and is assessed appropriately.

Regulation and Investor Expectations

Regulatory scrutiny has reinforced this direction of travel. The FCA’s review of private market valuation practices placed greater emphasis on governance, independence, documentation and the ability to undertake ad hoc valuations when material events occur. Kroll contributed its expertise to the industry’s work around the review, and its findings reflected many of the issues we see in practice as managers seek to strengthen valuation governance and consistency.

These developments are taking place alongside the expansion of private markets to a broader investor base. The growth of ELTIFs, LTAFs, wealth management products and other structures mean private assets are increasingly being held by investors accustomed to greater transparency and more regular reporting.

Where Valuation Goes Next

There remain practical and economic constraints on how frequently private assets can be independently valued, and I do not expect the industry to move immediately toward daily independent valuations across entire portfolios. But what has changed is the infrastructure supporting the process. Investment in technology, data and valuation systems over the past 15 to 20 years has generated considerable efficiencies, and AI is now providing another set of tools that can support that infrastructure.

At Kroll, our focus today is primarily on using AI around the valuation process rather than using it to generate the valuation itself. That includes scanning media and other information across portfolios containing hundreds of investments to identify developments that could have a material impact on value, as well as applications in data collection, data entry and supporting analysis.

Kroll has a particularly broad perspective on this evolution. We are the leading independent provider of illiquid portfolio pricing valuation services to the alternative investment community, while our Transaction Opinions practice ranks first globally for the number of fairness opinions delivered both in 2025 and over the past 20 years. That scale gives us visibility across asset classes, managers and market cycles, and what we are seeing today is a clear movement towards greater frequency alongside stronger expectations around independence, governance and transparency.

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