Mark-to-Market & Fair Value Services
At HedgeStar, we value a broad range of financial instruments, from plain vanilla to exotic. We support asset classes including municipal bonds, foreign debt, illiquid securities and derivatives. We have a proven, auditor-validated process for determining fair value as defined by ASC 820, IFRS 13, and GASB 72.
As a leading independent valuation specialist, HedgeStar is uniquely positioned to help clients meet fair valuation requirements related to financial assets and liabilities. Clients of all sizes and sectors rely on us to provide their valuation reports at any frequency – daily to annual. We can do the same for you. Learn more about fair value.
HedgeStar provides valuation of level 1 financial instruments including equities, exchange-traded futures/options and highly liquid debt securities such as on-the-run treasuries, commercial paper and short-term discount notes.
Our level 1 valuations include direct observable inputs such as end-of-day traded prices on relevant exchanges. We deliver a customized report to our clients that can be used for financial statement preparation. The report also contains appendices that include valuation methodology, fair value hierarchy and other information upon request.
HedgeStar provides independent, unbiased values for level 2 instruments such as debt, modeled equities, derivatives and other market mechanisms. Debt instruments may include government and agency bonds, corporate bonds, fixed and variable rate municipal bonds, and many types of bank loans. HedgeStar also values a broad range of derivatives that may include over-the-counter swaps, options, futures and forwards across interest rates, currencies and commodities asset classes.
Our valuations are available end-of-day on a daily basis and may include broker quotes on the same or similar instruments, or mid-market valuations. Mid-market valuations are performed using observable, mid-point inputs between published bid and ask prices/rates. Modeled fair value calculations include the effect of non-performance risk – also known as Credit/Debit Valuation Adjustments – as applicable.
HedgeStar provides valuations on level 3 instruments such as illiquid securities, barrier options, multi-layer swaps, private company stock options/warrants and other hard-to-value assets and liabilities.
Our team of quantitative analysts uses robust valuation engines and tools to arrive at a reasonable fair value for level 3 instruments. These may include a single, calibrated model or several models utilized to produce valuation outcomes based on assumptions similar to those of other market participants.