Private credit and valuation in quiet markets

Private credit instruments rarely trade. Between origination and repayment, a loan’s value must usually be estimated rather than observed, because no active market is quoting it. That is not a flaw in the asset class; it is the normal condition of valuation in less liquid markets — and it is exactly where valuation governance carries the most weight. When there is no market price to corroborate a number, the process that produced the number has to do the corroborating instead.

Valuing without observable prices

The IVSC has addressed this directly. Its February 2026 article on using IVS to strengthen quality and transparency in private credit valuations examines what credible valuation looks like when inputs are non-observable: disciplined process, defensible data and explicit reporting take the place of the external check a traded price would normally provide. The message is not that quiet markets cannot be valued well — it is that valuing them well demands more structure, not less.

Quality control becomes a requirement

Among the proposals in the current standard-setting cycle is a new standard, IVS 107 Quality Controls, which would make quality control an explicit, structured requirement rather than an implicit expectation. The proposal sits within the IVS 2028 Exposure Draft, consulted on between 30 January and 30 April 2026, with the next edition of IVS due to be issued in January 2027 and effective from January 2028. For private credit funds, where valuations are produced repeatedly across large books of positions, a formal quality-control discipline maps naturally onto how the work is actually organised.

Data, models and judgement

The same article sets out where the proposed revisions to the General Standards bear most directly on private credit practice.

The speed question

Valuation cycles are also compressing. In Fair Value in the Fast Lane, an IVSC interview with Abhishek Pandey of 73 Strings, private markets are described as no longer quarterly: in an IVSC/73 Strings webinar poll, over half of respondents said they expect monthly, weekly or on-demand valuations, while fewer than one in six firms feel equipped to re-run valuations in real time during macro shocks. Pandey’s formulation is worth keeping to hand: “A valuation that cannot be explained or traced back to its assumptions isn’t a valuation — it’s an output.” Speed without traceability does not produce more information; it produces more outputs.

Uncertainty, stated plainly

Quiet markets also widen the range of credible outcomes, and the standards community has become more explicit about saying so. The IVSC’s Perspectives Paper Managing and Communicating Value Uncertainty (May 2026) distinguishes valuation risk — errors of process, which can be mitigated — from value uncertainty, which is inherent and should be managed and disclosed. It notes that transparency about uncertainty strengthens confidence in a valuation rather than undermining it. For private credit, where the next observable price may be a long way off, that disclosure discipline is not an admission of weakness. It is what makes the number usable by the people who rely on it.