Fund audit with specialized valuations team

Business challenge

A new commercial real estate fund with a portfolio comprised of mezzanine loan securities and real estate properties had developed their own internal valuation models for the investments. The fund was required by their limited partner agreement to have an audit performed. Additionally, the management team had fund and industry questions they wanted insight into, including:

  • How changes to regulations might affect the valuation models,
  • The assumptions used in the models themselves, and
  • How the models aligned with industry standards.

Baker Tilly solution

Our financial services industry professionals and valuations specialists combined to create a multidisciplinary service team to audit the fund and provide the valuable insights the client needed as a new commercial real estate fund in an emerging market. This highly tailored team audited the fund for conformity with:

  • AICPA investment company standards
  • Fair value accounting standards
  • Private equity industry standards

The results

The fund benefited from one seamless audit incorporating both experienced financial services industry team members and specialized valuation professionals through:

  • More consistent valuation models in regards to US generally accepted accounting principles (GAAP)
  • An independent perspective on their internal valuation models
  • Conformity with US GAAP accounting and reporting requirements
  • Consideration and implementation of industry best practices
  • Conformity with accounting regulations including AICPA Investment Company Audit Guide, Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) 810-Consolidations, and ASC 820-Investments