After a general partner (GP) provides a valuation statement, any subsequent cost-impacting transactions cause the investment’s unrealized gain/loss (URGL) to diverge from the stated amount. Valuations are typically received on an infrequent basis, such as quarterly, so these transactions can result in large variances.
Beginning in V17 R2.51, price conversion functionality is available to roll forward the most recent market value and adjust it for the net cost impact of any subsequent transactions, as shown in the example below.
GP Statement | Transactions Month 1 | End of Month 1 | Transactions Month 2 | End of Month 2 | |
|---|---|---|---|---|---|
Cost | 10,000,000 | 1,000,000 | 11,000,000 | -2,000,000 | 9,000,000 |
Market Value | 12,500,000 | 13,500,000 (calc’d) | 11,500,000 (calc’d) | ||
URGL | 2,500,000 | 2,500,000 | 2,500,000 |
Price conversions are available in Add Issue Price Conversion, Edit Issue Price Conversion, and Add/Edit Price Exchange Conversion. There is logic to identify the most recent market value, look up the cost as of that date, compare it to the cost as of price date, and apply the difference to the most recent market value. The table below explains each field involved in the process and which are stored for audit purposes. These fields are stored in the PRICE table for direct price loads or PRICE_EXCHANGE for Pricing Center or Reference Data Center (RDC) Pricing.
The price conversion event must be submitted for each holding on each date when a valuation is required. This can be done manually using the panels mentioned above, or in an automated fashion using Message Center with the templates below.
CSV Direct Price Load:
CSV Price Exchange:
Field | Tag | Value | Column Name |
|---|---|---|---|
Source Name | 1102 | Ensure you select the appropriate source for the position being valued. It should match the entity’s Private Equity Price Source (18452). This is critical if you hold the same security master file (SMF) across multiple funds and are using Private Equity Price Source to apply a different market value to each position. | SRC_INTFC_INST |
Effective Date | 1109 | Price date. | EFFECTIVE_DATE |
Price Type Code | 1843 | Set to | PRICE_TYPE_CODE |
Pricing Entity ID | 7107 | If a value is not provided, it will be looked up automatically. This is fine if there is a 1:1 relationship between entities and SMFs for Private Markets. You must populate the appropriate value if you hold the same SMF across multiple funds to ensure the correct adjustment is applied. | ENTITY_ID |
Current Cost | 128 | Looked up automatically based on Effective Date. | |
Last Cost | 7686 | Looked up automatically based on Most Recent Close Price Date. | |
Cost Delta | 7687 | Calculated as Current Cost - Last Cost. | |
Most Recent Close Price Date | 513 | Looked up automatically. | PX_SOURCE |
Most Recent Close Price | 1852 | Looked up automatically. | PX_REFERENCE |
Closing Price OR Price | 481 or 7723 | Calculated as Most Recent Close Price + Cost Delta. | PRICE |
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