07/08/2026
Valuation in Private Credit Instruments
As global private credit expands beyond $2 trillion AUM, the market is facing a critical inflection point. Rising default metrics, an influx of P*K (Payment-in-Kind) conversions, and heightened fund redemption pressure have placed valuation transparency directly at centre stage.
In our latest publication, AVISTA Group breaks down:
• The Valuation Dilemma: Why Level 3 fair value marks have transitioned from a back-office accounting exercise to a core fiduciary duty.
• DCF & Discount Rate Methodology: Step-by-step application of the build-up approach—factoring in risk-free rates, credit spreads, country risk, and illiquidity premiums.
• Key Valuation Considerations: Navigating structural protections, P*K amendments, and technology sector exposures.
• Governance Best Practices: 5 actionable steps to ensure valuation models withstand auditor and Limited Partner (LP) scrutiny.
As private credit matures into a pillar of global capital markets, independent, defensible valuations are essential to maintaining investor confidence, strengthening risk management, and ensuring regulatory compliance.
Read the full article on our website: https://www.avaval.com/en/research-and-insights/Valuation-in-Private-Credit-Instruments