SEC staff reminds funds on private-asset fair value as private credit in registered fund portfolios hits $270 billion

The SEC staff's statement on fair value measurement and disclosure for private assets opens with a number, and the number carries its own population label. Private credit investment within registered fund portfolios grew from $170 billion in December 2020 to $270 billion in December 2025, a rise the staff puts at nearly 60%. Alongside the figure comes the list of registrants it covers: registered closed-end funds, interval funds, tender offer funds, business development companies, and private funds registered under the Securities Exchange Act of 1934, all of them required to measure such investments at fair value after purchase.

The statement creates no new obligation. Issued by the staff of the Office of the Chief Accountant and the Division of Investment Management, it is framed as reminders about areas of significant judgment under FASB ASC Topic 820, Fair Value Measurement, and as a push for what the staff calls targeted and transparent disclosure. Reinforcing requirements registrants already follow under U.S. GAAP — and, for certain registrants including business development companies, the regulatory framework under the Investment Company Act of 1940 — will promote greater consistency and clarity in the financial information provided to investors, the staff writes.

For advisors, the vehicles most likely to matter are interval funds and BDCs, with registered closed-end funds and tender offer funds alongside them. All four sit in the population the staff identifies: registrants required to measure these investments at fair value after purchase, which puts a valuation and a description of that valuation in front of investors every reporting period.

The measurement is the difficult half, and the staff spends most of its words there. Private credit assets are, in the staff's description, typically illiquid, individually negotiated loans that do not trade on established secondary markets and therefore generally lack readily available quoted prices. Determining fair value for such an asset frequently requires the use of significant unobservable inputs, meaning the measurements are typically categorized as Level 3 within the fair value hierarchy, and choosing a valuation technique, identifying the relevant inputs and weighting the assumptions inside it are all judgment calls. Those are the areas the staff files under significant judgment.

The value a client sees for such a holding rests on that measurement, which is why the statement's second clause carries as much weight as its first. The staff attaches the assets' risk characteristics to the same obligation as the number itself, and asks for disclosure targeted at the specific assets rather than left generic. For an advisor comparing private-credit sleeves, that pairing is where the statement bites: the technique, the inputs behind it and the description of the risk are either put in front of the investor or they are not, and that same disclosure is what an advisor has to work with when a client asks how a holding is priced.

The staff names a second audience, the auditors, described as responsible for evaluating management's judgments and the sufficiency of a registrant's disclosures. That places the annual audit among the checkpoints where a private-credit sleeve's valuation and its description get tested.

A due-diligence list follows almost directly from the statement's own vocabulary. Does the fund document its valuation technique and the inputs underneath it? Are the risk characteristics of the loans described rather than gestured at? Is the disclosure specific to the assets? Each question traces to ASC 820 or, for business development companies, to the Investment Company Act framework the staff cites, and each is something an advisor can put to a sponsor before a sleeve goes into a model.

The staff is explicit that exposure to private credit assets is not limited to funds registered under the Investment Company Act and to business development companies, and that the reminders in the statement are relevant to all registrants with exposure to private credit assets. That is a wider set of filers than the wrapper list suggests, and it applies the same expectation — rigor over measurement and over disclosure — to any registrant whose books now carry individually negotiated loans.

PWD has argued that the advisor alt shelf is an operational problem before it is a product problem, with administrators and rebalancing engines deciding what actually reaches client accounts. The SEC staff statement sits a layer beneath that. Whatever an administrator processes is a fair value measurement, governed by ASC 820 and, for certain registrants, by the Investment Company Act framework, so an advisor weighing a private-credit sleeve is holding two questions the statement keeps together: whether the fund can defend the number, and whether it tells the investor enough about the number for the holding to be explained.

The statement is framed as reminders under standards registrants already follow, and its weight comes partly from the two offices issuing it jointly. It is also the origin of the growth figure. The staff observed the near-60% increase in private credit within registered fund portfolios through its review of registrants' filings and engagement with market participants, which means the number and the reminder came out of the same exercise — worth remembering the next time a private-credit pitch leads with the size of the market.