Valuations Under Scrutiny: What UK and European Private Market Firms Should Focus On

Valuations in private equity, venture capital and private credit have come under renewed attention in the UK. Recent regulatory commentary highlights weaknesses in governance, conflicts of interest and transparency. For managers across the UK and Europe, valuation practices now sit at the centre of investor trust, regulatory expectations and overall fund credibility.

Why this matters

Valuation figures feed into performance reporting, fundraising conversations, fee calculations and investor disclosure. Any gaps in methodology or governance can create meaningful risks. With regulatory focus increasing, valuation readiness has become a core part of operational resilience for private market firms.

What is driving the shift

• Rapid growth of private markets and larger pools of illiquid assets

• Limited price discovery compared to public markets

• Rising scrutiny from regulators seeking consistency and investor protection

• The role of valuations in performance marketing and long term return expectations

Where value and risk sit today

• Ensuring independent challenge in valuation committees

• Documenting how methodologies are selected and applied

• Explaining valuation decisions clearly to LPs

• Demonstrating consistency between valuations, reporting and marketing materials

• Identifying and managing conflicts linked to carry, fees or portfolio transactions

Risks and controls to get right

• Weak oversight may undermine investor confidence

• Ad hoc revaluations without predefined triggers can create inconsistency

• Conflicts of interest must be identified, documented and managed

• Firms need a clear audit trail covering assumptions, data sources and approval steps

KPIs to monitor

• Percentage of assets independently reviewed

• Frequency of off-cycle or stress-driven valuation adjustments

• Number of valuation governance issues raised during internal reviews

• Time taken to produce valuation reports during reporting cycles

• Investor queries related to valuation transparency or methodology

Takeaway

Valuation governance has become a defining marker of maturity in private markets. Firms that build strong, well-documented valuation processes and maintain transparency with investors will be better positioned in an environment where scrutiny and expectations continue to rise.