Fairmat, software solution and independent valuation services to meet Alternative Investment Fund Manager Directive (AIFMD) 2011/61/EU

By July 22 2014 Alternative Investment Fund Manages (AIFMs) must ensure that appropriate procedures are established for a proper and independent valuation of the fund's assets to be carried out at least once a year and more frequently where appropriate, such as where there is an increase or decrease in the fund's capital or every time there is evidence that the last determined value is no longer fair or proper. (Article 19 AIFMD).

AIFMs shall ensure that the valuation function is either performed by:

  • an external valuer, being a legal or natural person independent from the AIF, the AIFM and any other persons with close links to the AIF or the AIFM; or
  • the AIFM itself, provided that the valuation task is functionally independent from the portfolio management and the remuneration policy and other measures ensure that conflicts of interest are mitigated and that undue influence upon the employees is prevented.

The valuation policies and procedures shall ensure that before being used a model is validated by a person with sufficient expertise who has not been involved in the process of building that model. The validation process shall be appropriately documented

Where an external valuer performs the valuation function, the AIFM shall demonstrate that:

  • the external valuer is subject to mandatory professional registration recognised by law or to legal or regulatory provisions or rules of professional conduct;

  • the external valuer must provide sufficient professional guarantees to be able to perform effectively the relevant valuation function by having:
  1. sufficient personnel and technical resources;
  2. adequate procedures safeguarding proper and independent valuation;
  3. adequate knowledge and understanding of the investment strategy of the AIF and of the assets the external valuer is appointed to value;
  4. sufficiently good reputation and sufficient experience with valuation.

  • the appointment of the external valuer complies with the requirements of Article 20(1) and (2) and the delegated acts adopted pursuant to Article 20(7).

Given this law framework, Fairmat is the answer to meet the requirements both with its software solutions and with its independent valuation services.


Software solutions

With Fairmat Professional, our desktop solution, any quantitative analyst can easily define and price any financial products (even those with complex structure and payoffs) for all asset classes. 

Having full control over the selection of valuation inputs, sources and methodologies by: 

  1. choosing among the contributed theoretical models, calibrations and parameters estimation techniques;
  2. adding your legacy theoretical models and calibrations;
  3. using the integration with market data provider (Bloomberg) or even by input your custom market data. 

Sensitivitiy and impact analyses can be performed on each parameter or variable as well.

These features combined with the fact that any theoretical model or analysis is properly documented and also examinable directly with the typical modes of the open source world, makes Fairmat useful for identifying reasons of different valuations with counterparties and suitable for audit needs.

If you need to manage a portfolio of products, you can use our enterprise solution, available as intranet based or as a cloud service.  In this solution functional analysts can easily map products by choosing from a range of standard or custom templates (you can upload your financial products models on the system), then perform valuations or analyses, monitor and track the value and other metrics of outstanding contracts. 

Contact us to schedule a remote presentation of our software solutions.

Independent Valuation and Validation Services

By the mean of its parent Consulting Company, IFA Consulting, Fairmat solutions were used to valuate and analyse thousands of financial contracts since 2002.

IFA Consulting, a 18 ter TUF (Italian Consolidated Law on Financial Intermediation) and MiFid Compliant Company, became the Italian market leader in financial litigation support, advising the most relevant case in the domestic market like Parmalat, City of Milan, Region of Apulia (see in detail our companies curriculum).

With a consolidated team of quantitative analysts, PhD and physics and by leveraging on Fairmat Technology, our Companies are at your disposal to perform independent valuations of your portfolios.  

Contact us to get more informations about our independent valuation services.