One of the main reasons for the recent financial crisis was (and unfortunately still is) the mispricing of financial assets, due to the lack of transparency in financial markets. One of our main goals is improving transparency in the market to help prevent apossible future collapse.
In recent years, buzz words like “fair value” and “independent valuation” have gained on popularity. Politicians, supervisory agencies, investors and bankers have begun to realize how important (and complex) independent valuation is. Today all key financial regulations, including the IFRS, FAS, SolvV, MaRisk and InvRBV, share a common understanding of the valuation of illiquid instruments. Our work at Value & Risk conforms to the most rigorous professional standards and complies with the requirements of both European and American valuation regulations.
We are glad to be a one-stop-shop for our clients’ valuation services; all we need are the identifiers (e.g. ISIN or CUSIPS) and reference data of the instrument (e.g. the terms and conditions). From there, we handle the analysis, extraction of market data, pricing and ISAE3402 quality assurance procedures. Our clients enjoy being able to outsource all pricing and pricing validation functions to our valuation experts at Value & Risk and concentrate on their own core business.
Liquidity and Complexity:
Our market niche is the theoretical valuation of less liquid, OTC and complex assets. For the valuation of complete portfolios that also include more liquid assets, we work hand in hand with market data vendors. We focus on:
- Less liquid instruments such as loans, private placements and illiquid bonds
- OTC Instruments
- Structured products, including the most exotic assets
- ABS products: MBS, CMBS, CLO etc.
- Hybrid, tailor-made and special products.
One of the core services we provide is the independent valuation of financial assets. All of our other services are based on our understanding of valuation and risk.
We distinguish between three levels of liquidity:
- Partially liquid
We employ theoretical valuation methods to assist in the process of identifying levels of liquidity, evaluating illiquid and partially liquid assets, and verifying liquid market prices.
Supported Asset Classes:
- Equity (EQ)
- Fixed-income (FI)
- Interest rate-linked (IR)
- Foreign currency (FX)
- Credits (CR)
- Commodities (CM)
- Inflation-linked (INF)
- Hybrids (combination of different asset classes)