Demi Chung, PhD, Senior Researcher at the EDHEC Infrastructure & Private Assets Research Institute, led a session at SIPA Day 2026 in New York, organised by Scientific Infra & Private Assets (SIPA), part of PEI. The session explored how private asset fair values are produced and governed, and what happens between the standards on paper and the number ultimately reported.

SIPA Day brings together the latest research and analytical insights across private equity and infrastructure, covering pricing, risk, performance and valuation.

Demi’s session drew on discussions with those who produce, receive and review valuations, as well as those who write the rules, including general partners, asset owners and fiduciaries, valuers, auditors, regulators and standard-setters.

Key takeaways from the session

• The standards define; the firm completes. Accounting standards establish the definition of fair value, while much of the operational detail sits within firms’ own internal valuation guidelines.
• Market movements do not necessarily pass straight through to reported values. In the period examined, risk-free rates rose by 2–4%, while infrastructure discount rates increased by only 25–75 basis points.
• Challenge can be extensive without necessarily changing the number. Multiple layers of review may strengthen governance and process while still leaving significant room for judgement.

Private asset valuation is governed by established standards, internal policies and multiple layers of review. Yet firms can still arrive at different approaches to determining fair value.

Rather than asking simply whether carrying values are right or wrong, Chung’s work considers a more fundamental question: what do valuation processes have in common across firms that measure differently?

The standards define. The firm completes.

At the top of the framework sit IFRS 13 and ASC 820, defining fair value as an exit price at the measurement date. The IPEV Guidelines help operationalise those principles for private capital.

But the research identifies another important layer: the firm’s own valuation policy.

No respondent worked from accounting standards alone. The detailed decisions required to translate broad principles into a valuation are ultimately embedded within firms’ internal guidelines.

As Chung summarised during the session:

“The standards define. The firm completes.”

For investors, this distinction matters. Firms may operate within the same accounting framework while applying different internal approaches to assumptions, inputs and valuation decisions.

One definition, different working meanings

The same variation can be seen in how fair value is interpreted in practice.

While the formal definition is common, the research identifies different working meanings attached to it, including normal market circumstances, a longer-term horizon and assumptions about the price at which a meaningful position could transact.

Each interpretation can be internally coherent.

But it also means that a common definition does not necessarily produce a common response to the same market event.

For institutional investors comparing valuations across managers, portfolios and structures, that raises an important question around comparability.

When markets move, valuation inputs may move differently

The recent interest-rate cycle provides a useful illustration.

From 2022, risk-free rates rose by 2–4%, while infrastructure discount rates increased by only 25–75 basis points in the examples examined in the research.

The difference does not, by itself, indicate that valuations failed to respond.

Rather, it highlights the importance of understanding how market information enters a valuation process, which assumptions absorb that information and what ultimately causes the reported number to change.

For investors, the relevant question may therefore be less about whether a particular market variable moved and more about how that movement was reflected within the valuation framework.

Challenge is abundant. It rarely rejects.

Private asset valuations can be subject to extensive governance and review.

At one pension fiduciary examined in the study, a valuation passed through four independent reviews. Yet the research also raises questions about the extent to which review and challenge result in changes to the reported valuation.

This distinction matters.

A process can be thoroughly documented, independently reviewed and compliant with established procedures while still leaving significant room for professional judgement.

For institutional investors, the question is therefore not only how much governance surrounds a valuation, but also what that governance is designed to challenge and what would actually cause the number to move.

What should investors ask?

The presentation points towards several practical questions for allocators.

Who selected the comparables and discount rate? What, other than the calendar, would cause the valuation to change? And how do valuation practices compare across different investment structures?

These questions are becoming increasingly relevant as private assets play a larger role in institutional portfolios and reported valuations increasingly influence investment decisions.

The broader message from the research is not that private asset valuation lacks governance or standards.

It is that understanding the final number requires looking beyond it to the assumptions, internal policies and processes through which that number was produced.

The conversation continues at EIPA Day 2026, organised by the EDHEC Infrastructure & Private Assets Research Institute, on 8 December at Convene, 22 Bishopsgate, London.

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