Deloitte Survey: Private Markets Push Valuation Practices Forward

Deloitte’s 2026 survey of 95 registered investment company fund groups finds expanding private-market exposure and greater complexity in valuation oversight. Private equity exposure was 51% and private credit 33%; 77% of participants began or increased AI use, while only 4% perform a full private-credit valuation update daily. Among respondents examined by the SEC, 53% cited valuation policies and procedures as an examination focus, down from 58% in 2025.

Analysis

The key market implication is a widening gap between pricing frequency and valuation certainty: daily marks tied to observable inputs do not resolve infrequently refreshed assumptions about cash flows, recoveries, or methodology. In a credit downturn, that gap can make reported NAVs and performance appear more stable than underlying risk, then produce abrupt write-downs when defaults, restructurings, or secondary-market prices force judgment updates. This matters most where private-credit exposure grows alongside daily-liquidity or frequent-redemption features; liquidity mismatch, rather than valuation policy alone, is the potential transmission channel.

Over 1–3 months, increased examination attention could raise compliance, documentation, and independent-review costs. Larger fund administrators, valuation specialists, and established audit/advisory firms may gain work, but Deloitte’s survey is not independent evidence of revenue conversion. AI-enabled documentation and review may improve throughput, yet also creates model-validation, data lineage, and accountability costs; human oversight limits the near-term case for treating AI adoption as a margin windfall.

Over 6–18 months, scrutiny could favor managers with demonstrably repeatable marks and robust controls, while exposing weaker processes and potentially increasing dispersion in reported returns. Contrarian point: more frequent marks may be interpreted as greater transparency, but observable-input refreshes are not equivalent to full re-underwriting. The survey does not establish that marks are currently mispriced or quantify investor losses, so this is a risk-monitoring signal, not a standalone short thesis.

Key Decisions for Investors

• No broad sector trade on this survey alone. For private-credit and alternative-manager exposures, review liquidity terms against asset-level valuation cadence and track write-downs, non-accruals, restructurings, and secondary-market discounts over the next 1–3 months.
• Treat valuation-technology and service providers as a watchlist, not an automatic long: verify incremental contract wins, recurring revenue, and margins before underwriting benefit. AI adoption claims alone do not establish commercial returns.
• Stress-test managers with daily-priced products: compare daily observable-input marks with the timing of full assumption updates, redemption windows, and available liquidity. Escalate where investor liquidity is materially faster than asset realization.
• Falsify the heightened-risk thesis if subsequent filings and disclosures show stable credit performance, transparent and timely assumption updates, and no deterioration in liquidity coverage; strengthen it if examination findings, delayed marks, or clustered write-downs emerge.