The US Securities and Exchange Commission has issued a reminder to asset managers, auditors and other market participants to strengthen their approach to valuing private assets and explaining those valuations to investors as liquidity pressures across private markets increase, according to a report by Bloomberg.
A joint statement from the SEC’s Office of the Chief Accountant and Division of Investment Management does not introduce new requirements, but highlights existing obligations around fair-value measurement and disclosure. The regulator said it expects firms to maintain robust valuation policies and procedures and provide investors with meaningful information about the assumptions, judgements and risks underlying private asset valuations.
The guidance comes as private market managers seek to expand access to private investments among individual investors and retirement savers, while funds face longer holding periods and increasing pressure from investors seeking liquidity.
The SEC said private credit warrants particular attention because the underlying markets can be illiquid and some loans do not have readily observable market prices. Assets held by registered funds in private credit have increased substantially in recent years, rising from $170bn in December 2020 to $270bn in December 2025, according to the regulator.
Liquidity constraints have become a growing issue for private credit funds, with redemption requests forcing some vehicles to restrict withdrawals or otherwise limit investors’ ability to access their capital. The pressure has also raised questions about the assumptions underpinning valuations for assets that cannot easily be sold.
The SEC’s statement also addresses the role of auditors, calling on them to challenge management judgements around fair-value estimates and assess whether assumptions remain appropriate as market conditions change.
The regulator said the complexity and judgement involved in valuing private assets can increase the potential for management bias, making professional scepticism particularly important when auditors review financial statements.
Disclosure around investments that are on non-accrual or are otherwise non-performing may also be significant for investors, according to the SEC. The agency highlighted the importance of providing information on the status of payment-in-kind interest and other factors that could affect an investor’s understanding of an asset’s value and performance.
