Asset owners and the long game of valuation confidence

Pension funds and other asset owners measure in decades, but they cannot wait decades to know what they own. Interim valuations of private and less liquid holdings feed funding assessments, allocation decisions, fee calculations and member communications long before any asset is sold. For owners with long horizons, confidence in valuation is not a quarterly concern; it is infrastructure — and like infrastructure, it is built deliberately or not at all.

Why interim values matter to long-term owners

As allocations to private markets and real assets have grown, so has the share of portfolio value carried at appraised rather than traded values. In less liquid or harder-to-observe markets, robust valuation governance matters most. The International Valuation Standards give that governance a structure, addressing scope of work, bases of value, valuation approaches, data and inputs, models, and documentation and reporting in turn — and the framework is used in more than 100 countries, which matters to owners whose portfolios cross borders.

A collective voice in standard-setting

Asset owners are not passive consumers of standards. The IVSC Investor Forum, established in 2023 and chaired by Doug McPhee, convenes valuation leaders from major institutional investors collectively managing more than USD 20 trillion in assets. Meeting under the Chatham House Rule, it gives the investment community a candid, structured channel into how the standards evolve — a reminder that the rules governing the numbers asset owners rely on are open to their influence.

Discipline from performance standards

Valuation expectations also arrive through performance reporting. The GIPS standards (2020), issued by CFA Institute, require that real estate be externally valued at least once every 12 months by an independent, professionally designated valuer. The GIPS standards govern performance presentation and do not prescribe a particular set of valuation standards; their contribution is the discipline of independence and frequency. That discipline complements, rather than duplicates, the standards that govern how the valuation itself is performed — two layers an asset owner can check separately.

Confidence includes uncertainty

The hardest part of valuation governance is also the most honest part: acknowledging what the number cannot tell you. The IVSC’s Perspectives Paper Managing and Communicating Value Uncertainty (May 2026) distinguishes valuation risk — errors of process, which can be mitigated through controls — from value uncertainty, which is inherent and should be managed and disclosed. It notes that even a fully IVS-compliant valuation may support a range of credible outcomes, and that transparency about uncertainty strengthens confidence rather than undermining it. For an asset owner, a manager who can say how wide the credible range is, and why, is offering more information, not less assurance.

Questions worth putting to managers

Valuation confidence is built one diligence conversation at a time. Four lines of questioning cover most of the ground.

None of these questions requires an asset owner to second-guess a valuer’s judgement. They require only that the judgement be visible — which is precisely what the standards are for.