Private Credit Valuation Software: Why Credit-Native Workflows Matter
TL;DR
Private credit valuation software should tie each approved valuation model to the loan and covenant records behind it.
Lumonic connects borrower and covenant records directly to fair value marks, with each input linked to its source.
Buyers may use linked Excel workbooks or products such as Allvue, iLEVEL, FundCount, Chronograph, Carta, and 73 Strings. These options address parts of the valuation process but do not provide a credit-native valuation workflow.
Evergreen and interval funds need software that supports monthly NAV strikes without requiring a corresponding increase in analyst work.
Audit-ready software should preserve a traceable record of valuation methods and decisions, including source evidence and third-party reconciliations, for ASC 820 and SEC Rule 2a-5 oversight.
Why quarterly Excel workbooks become hard to maintain
Quarterly Excel workbooks become difficult to maintain as portfolio growth increases the number of manual updates required in each valuation cycle. An analyst may enter borrower financials in one file and calculate covenants in another before carrying approved inputs into a valuation model. Manual handoffs can carry outdated figures or assumptions into the valuation model.
Linked formulas make those handoffs fragile. Changes to file locations or workbook structure can break references across linked workbooks. Some errors appear immediately, but others remain hidden because the affected formulas continue to produce plausible values. Reviewers then spend time checking formulas and tracing links instead of assessing the mark.
Excel also forces analysts to process updates one borrower at a time. Each new financial statement requires someone to update the borrower data and model before preparing committee materials. Shared drives create version confusion when reviewers save separate copies or edit different model versions during the same close.
A workbook rarely preserves the full reasoning behind a mark. Reviewers can inspect formulas, but they may struggle to connect an input to the original borrower document, credit agreement, or approved adjustment. Comments and file names provide partial context, while email often holds the supporting explanation.
Quarterly cycles can absorb some of this manual work because analysts have more time between marks. Monthly NAV strikes expose the limits quickly. Repeating the same borrower-level work every few weeks requires more analyst hours and leaves less time for review. When an auditor or LP requests support, your staff must reconstruct the evidence from scattered files and email rather than retrieve a complete valuation record.
Three common alternatives and their limits
Funds can keep linked Excel workbooks, but workbook maintenance grows with the portfolio and each valuation cycle. Analysts must maintain assumptions and references across files while confirming that committee materials use the approved model version. Excel remains flexible for small portfolios, but a standalone workbook does not automatically enforce version control or preserve a reliable path from a reported value to the source document.
Based on public product information that Lumonic has not independently verified and that may change, buyers often consider legacy fund administration suites such as Allvue, iLEVEL, and FundCount when spreadsheets become difficult to control. These products primarily support fund accounting and investor reporting, so they address only part of a loan-level monitoring and valuation workflow. Because implementations may rely on standardized or mapped inputs, buyers should test how each suite handles scanned certificates and inconsistent borrower spreadsheets. For example, iLEVEL uses mapped templates for nonstandard data and provides covenant dashboards, but buyers should verify whether an implementation parses compliance certificates and preserves source-cell traceability. If an implementation requires extensive template mapping and configuration, the setup period can postpone improvements to the next close.
Equity-first portfolio tools present a different mismatch. Buyers may consider Chronograph, 73 Strings, or Carta for centralized company-level portfolio data and equity valuation review, but those use cases are only partial substitutes for loan-level credit monitoring and valuation. Buyers should test whether each platform supports loan terms and ongoing covenant calculations throughout the reporting period instead of focusing on a quarterly company-level mark or EBITDA multiple. Equity-first architecture can accommodate some credit data, but covenant testing and certificate handling may remain separate tasks rather than inputs that directly inform the valuation record.
A credit-native platform starts with the instrument and its governing documents. Lumonic connects borrower reporting, covenant obligations, and valuation work within the same data model, so analysts can trace calculations back to submitted financials and credit terms. A shared credit data model lets private credit funds use recurring monitoring data to support each fair value mark.
Credit-native valuation: yield analysis and DCF built for loans, not comps
Credit instruments require valuation methods that reflect contractual cash flows, repayment priority, and borrower-specific terms. Equity comparable analysis estimates enterprise value by applying market multiples to metrics such as EBITDA. That estimate can inform credit risk, but it does not capture a loan’s coupon, maturity, amortization schedule, or prepayment terms.
Yield analysis estimates the price that produces an appropriate market yield for the position. The model needs the contractual payment schedule and loan pricing assumptions. For a revolver, the model may also need expected utilization and fees on undrawn commitments. A unitranche position can require separate treatment for cash and payment-in-kind interest under blended pricing.
A discounted cash flow model projects expected payments and discounts them at a rate consistent with the instrument’s risk. Expected cash flows may change when borrower performance increases default risk or makes a refinancing less likely. Prepayment assumptions also affect value because an early repayment can shorten the period over which the lender earns its contractual spread.
Credit terms can change the valuation inputs during the life of the loan. Borrower-specific EBITDA definitions determine covenant calculations, while step-down schedules tighten permitted leverage over time. Amendments may reset thresholds or pricing. A breach can change loan pricing or repayment terms. Valuation software must preserve those terms rather than treating leverage and EBITDA as static fields.
Lumonic feeds these models rather than replacing them. Analysts keep yield analysis and DCF in Excel, and Lumonic’s Excel add-in writes live formulas into the workbook that pull borrower financials, covenant calculations, and current credit terms straight from the platform, so the model runs on validated data instead of rekeyed figures. The add-in also calculates IRR on cash flows natively, and an EBITDA model can be built once and applied across the portfolio. Buyers should confirm that any platform can represent each position’s actual economics without forcing the analysis into an equity-multiple template.
One workflow instead of three disconnected systems
A private credit valuation workflow should feed borrower financials and covenant test results directly into the fair value mark. In a disconnected setup, one repository holds borrower reporting while a separate tracker calculates covenant compliance. Analysts then copy the same borrower figures into valuation workbooks, creating conflicting versions of the inputs.
Lumonic keeps those records in a credit-native data model. The platform ingests compliance certificates and traces each extracted figure to its source cell. Amendment-aware covenant tracking records step-down schedules and waiver periods while preserving borrower-specific definitions. Valuation analysts can therefore use the same underlying financials and loan terms that support the compliance calculation.
The valuation model consumes that data directly. Avante Capital Partners uses quarterly portfolio review data validated in Lumonic as inputs to its valuation models. This approach turned valuation from a separate manual effort into an extension of the review process, improving consistency, auditability, and efficiency without reducing the depth of analysis. For funds that model in Excel, live Lumonic formulas refresh those inputs each cycle, and every value carries a traceback to the source document that a reviewer can open.
Shared data keeps covenant and valuation records consistent when loan terms change. For example, an amendment may revise covenant definitions or thresholds. A standalone covenant tracker can reflect the new threshold while the valuation workbook continues using an older EBITDA definition. Lumonic connects each amendment and its supporting documents to covenant calculations and fair value work, so reviewers can identify which terms and figures supported a mark.
Lumonic's published customer results report that review preparation fell from two or three weeks to two or three days. According to other Lumonic case studies, automated testing eliminated more than 20 hours of intern work per cycle, while compliance delinquency, previously affecting 30–40 percent of borrowers, fell to near zero.
For valuation committees, source traceability makes review more direct. A reviewer can move backward from a fair value mark to the supporting compliance and loan records without reconciling separate systems first. Analysts spend less time proving where an input came from and more time assessing whether the selected methodology and assumptions remain appropriate.
Evergreen and interval funds: supporting monthly NAV cycles
Evergreen and interval fund managers must complete valuation closes more often than managers following a traditional quarterly cycle. Hamilton Lane’s SCOPE evergreen credit fund, for example, calculates valuations monthly and submits them to its valuation committee for review and approval. Some of the firm’s interval funds also conduct quarterly repurchase offers of at least 5 percent of shares, which ties current portfolio marks to recurring investor transactions.
Fund growth increases the volume behind each NAV strike. Evergreen assets across private markets reached approximately $700 billion in late 2024, up from roughly $200 billion in 2020. Semi-liquid fund assets nearly tripled over the same period to $349 billion. A valuation process built for four closes per year can struggle when the fund requires twelve.
Redemption requests make timely and supportable marks more consequential. Fitch data summarized by Crystal Capital Partners show that redemption requests across non-traded BDCs averaged 12.3 percent in the first quarter of 2026, more than twice the typical 5 percent quarterly cap. Outflows increased 48 percent from the prior quarter. Funds may scale requests back under their governing terms, but managers still need a current NAV to administer repurchases and communicate with investors.
Monthly NAV operations require software that compresses preparation time without weakening review. You should not have to rebuild linked workbooks or reconcile model versions before every committee meeting. Lumonic connects borrower financials and covenant data with fair value marks, so each monthly cycle can reuse governed inputs and documented approvals. Excel valuation models built on live Lumonic formulas refresh at each strike instead of being rebuilt, and Lumonic’s Model Context Protocol (MCP) connection can write those formulas into a workbook on request. Valuation professionals still make the judgment, while the software reduces the repeated preparation that would otherwise require more analyst capacity as the portfolio grows.
Staying audit-ready under ASC 820 and SEC Rule 2a-5
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Private loans often depend on unobservable inputs, but managers must still apply that market-participant framework. Valuation records should therefore explain the assumptions behind each mark rather than preserve only the final value.
SEC Rule 2a-5 requires four components for a good-faith fair value determination. A fund must assess valuation risks and establish and apply appropriate methodologies. The fund must also test those methodologies and oversee any pricing services it uses. For private credit, methodology testing can compare prior assumptions with later loan outcomes and valuations. Pricing-service oversight requires documented vendor review and investigation of material differences between internal and external marks.
A fund board may perform fair value determinations or appoint a valuation designee, typically the investment adviser. The designee applies the valuation program and reports to the board at least quarterly. The board selects and oversees the designee, reviews reporting, and retains ultimate responsibility for the valuation process. Funds must keep written valuation policies and supporting records available for at least six years.
Auditors and examiners need a traceable path through each valuation. For a loan mark, the record should connect the approved value to its model and supporting loan records. Amendments must flow into the relevant cash-flow and covenant assumptions. Committee approvals should record who changed each input and why, along with the supporting evidence.
Third-party valuation work also requires a documented reconciliation. Your records should show both values and how the committee investigated and resolved any difference. A difference caused by a revised recovery assumption requires different evidence than one caused by stale borrower financials. Saving only the final committee mark removes the reasoning that an auditor needs to inspect.
A connected data model can preserve valuation evidence without requiring you to reconstruct records from linked spreadsheets or separate systems. Lumonic extracts every number from source documents with automated health checks, and each figure that reaches a valuation model carries a traceback to the document it came from. When you test a methodology or review a pricing provider, you can follow each assumption back to its source and preserve the resulting decision without rebuilding the record during the audit.
An evaluation checklist for choosing valuation software
Use the same representative loan, source documents, and close calendar when testing each vendor. Record whether the vendor demonstrates each capability in the product or relies on manual work outside it.
Can the software support both yield analysis and DCF to term loans, revolving facilities, and unitranche positions? Ask how you can choose and document the methodology for each position.
How deeply does covenant tracking connect with valuation? Test whether updated borrower and covenant data flow directly from compliance certificates into the mark.
Can every valuation input be traced back to its supporting document? Select an EBITDA adjustment or interest-rate assumption and ask the vendor to trace it back to the relevant borrower financial statement or credit agreement provision.
How much can the software compress your quarterly or monthly close? Give the vendor your current close calendar and ask which steps the software automates and where manual review remains.
How does the software compare internal marks with outputs from third-party valuation firms? Ask whether it records each variance and its supporting review without relying on a separate reconciliation workbook.
What happens after the valuation committee approves a mark? Confirm that approved values and supporting data pass cleanly into fund accounting and LP reporting without rekeying information.
Can the software preserve an audit-ready record of each fair value determination? Ask how it retains a complete methodology and approval record with source evidence for the required period.
What implementation work falls on your staff? Ask the vendor to map one real borrower package and valuation model so you can assess the initial setup and ongoing maintenance.
Getting started with Lumonic
If you are evaluating a move beyond linked workbooks, you can explore Lumonic through a tailored demo.
Use the session to decide whether Lumonic can replace disconnected credit workflows without forcing debt positions into an equity-first model.
FAQs
What is the difference between yield analysis and DCF for loan positions?
Yield analysis estimates fair value by discounting a loan’s contractual cash flows at the yield a market participant would require for its risk profile, while a DCF discounts projected loan cash flows and recovery proceeds. Analysts run either approach in Excel and select the method suited to the loan structure; Lumonic supplies the model inputs through live formulas that refresh from validated borrower and covenant data.
Can Excel still work for a small private credit portfolio?
Excel can support a small portfolio with consistent reporting and centrally controlled quarterly models. Lumonic becomes relevant when linked workbooks require repeated updates or cannot trace a mark to its source documents. Centralized version control reduces broken references and conflicting model copies.
What does SEC Rule 2a-5 require of a valuation designee?
SEC Rule 2a-5 requires the valuation designee to assess valuation risks and apply and test the fair value program. The designee must also oversee pricing services and report quarterly to the board. Lumonic can keep valuation records and source documents within a traceable workflow. Organized records help the designee support board reporting and the required six-year retention period.
How do monthly NAV strikes change the close process for evergreen funds?
Monthly NAV strikes compress the full valuation and approval process into a recurring monthly schedule. Lumonic connects borrower financials and covenant results with each valuation cycle. A shared record reduces repeated data preparation. Analysts can spend more of the shorter close window reviewing assumptions and exceptions.
How are internal marks reconciled with third-party valuation firms?
Reconciliation compares the two marks and documents how the committee resolved differences in inputs or methods. Lumonic can preserve both valuation versions with their source evidence and approval history. Controllers and auditors can follow each variance back to the evidence supporting each party’s valuation.
Private Credit Valuation Software: Why Credit-Native Workflows Matter
TL;DR
Private credit valuation software should tie each approved valuation model to the loan and covenant records behind it.
Lumonic connects borrower and covenant records directly to fair value marks, with each input linked to its source.
Buyers may use linked Excel workbooks or products such as Allvue, iLEVEL, FundCount, Chronograph, Carta, and 73 Strings. These options address parts of the valuation process but do not provide a credit-native valuation workflow.
Evergreen and interval funds need software that supports monthly NAV strikes without requiring a corresponding increase in analyst work.
Audit-ready software should preserve a traceable record of valuation methods and decisions, including source evidence and third-party reconciliations, for ASC 820 and SEC Rule 2a-5 oversight.
Why quarterly Excel workbooks become hard to maintain
Quarterly Excel workbooks become difficult to maintain as portfolio growth increases the number of manual updates required in each valuation cycle. An analyst may enter borrower financials in one file and calculate covenants in another before carrying approved inputs into a valuation model. Manual handoffs can carry outdated figures or assumptions into the valuation model.
Linked formulas make those handoffs fragile. Changes to file locations or workbook structure can break references across linked workbooks. Some errors appear immediately, but others remain hidden because the affected formulas continue to produce plausible values. Reviewers then spend time checking formulas and tracing links instead of assessing the mark.
Excel also forces analysts to process updates one borrower at a time. Each new financial statement requires someone to update the borrower data and model before preparing committee materials. Shared drives create version confusion when reviewers save separate copies or edit different model versions during the same close.
A workbook rarely preserves the full reasoning behind a mark. Reviewers can inspect formulas, but they may struggle to connect an input to the original borrower document, credit agreement, or approved adjustment. Comments and file names provide partial context, while email often holds the supporting explanation.
Quarterly cycles can absorb some of this manual work because analysts have more time between marks. Monthly NAV strikes expose the limits quickly. Repeating the same borrower-level work every few weeks requires more analyst hours and leaves less time for review. When an auditor or LP requests support, your staff must reconstruct the evidence from scattered files and email rather than retrieve a complete valuation record.
Three common alternatives and their limits
Funds can keep linked Excel workbooks, but workbook maintenance grows with the portfolio and each valuation cycle. Analysts must maintain assumptions and references across files while confirming that committee materials use the approved model version. Excel remains flexible for small portfolios, but a standalone workbook does not automatically enforce version control or preserve a reliable path from a reported value to the source document.
Based on public product information that Lumonic has not independently verified and that may change, buyers often consider legacy fund administration suites such as Allvue, iLEVEL, and FundCount when spreadsheets become difficult to control. These products primarily support fund accounting and investor reporting, so they address only part of a loan-level monitoring and valuation workflow. Because implementations may rely on standardized or mapped inputs, buyers should test how each suite handles scanned certificates and inconsistent borrower spreadsheets. For example, iLEVEL uses mapped templates for nonstandard data and provides covenant dashboards, but buyers should verify whether an implementation parses compliance certificates and preserves source-cell traceability. If an implementation requires extensive template mapping and configuration, the setup period can postpone improvements to the next close.
Equity-first portfolio tools present a different mismatch. Buyers may consider Chronograph, 73 Strings, or Carta for centralized company-level portfolio data and equity valuation review, but those use cases are only partial substitutes for loan-level credit monitoring and valuation. Buyers should test whether each platform supports loan terms and ongoing covenant calculations throughout the reporting period instead of focusing on a quarterly company-level mark or EBITDA multiple. Equity-first architecture can accommodate some credit data, but covenant testing and certificate handling may remain separate tasks rather than inputs that directly inform the valuation record.
A credit-native platform starts with the instrument and its governing documents. Lumonic connects borrower reporting, covenant obligations, and valuation work within the same data model, so analysts can trace calculations back to submitted financials and credit terms. A shared credit data model lets private credit funds use recurring monitoring data to support each fair value mark.
Credit-native valuation: yield analysis and DCF built for loans, not comps
Credit instruments require valuation methods that reflect contractual cash flows, repayment priority, and borrower-specific terms. Equity comparable analysis estimates enterprise value by applying market multiples to metrics such as EBITDA. That estimate can inform credit risk, but it does not capture a loan’s coupon, maturity, amortization schedule, or prepayment terms.
Yield analysis estimates the price that produces an appropriate market yield for the position. The model needs the contractual payment schedule and loan pricing assumptions. For a revolver, the model may also need expected utilization and fees on undrawn commitments. A unitranche position can require separate treatment for cash and payment-in-kind interest under blended pricing.
A discounted cash flow model projects expected payments and discounts them at a rate consistent with the instrument’s risk. Expected cash flows may change when borrower performance increases default risk or makes a refinancing less likely. Prepayment assumptions also affect value because an early repayment can shorten the period over which the lender earns its contractual spread.
Credit terms can change the valuation inputs during the life of the loan. Borrower-specific EBITDA definitions determine covenant calculations, while step-down schedules tighten permitted leverage over time. Amendments may reset thresholds or pricing. A breach can change loan pricing or repayment terms. Valuation software must preserve those terms rather than treating leverage and EBITDA as static fields.
Lumonic feeds these models rather than replacing them. Analysts keep yield analysis and DCF in Excel, and Lumonic’s Excel add-in writes live formulas into the workbook that pull borrower financials, covenant calculations, and current credit terms straight from the platform, so the model runs on validated data instead of rekeyed figures. The add-in also calculates IRR on cash flows natively, and an EBITDA model can be built once and applied across the portfolio. Buyers should confirm that any platform can represent each position’s actual economics without forcing the analysis into an equity-multiple template.
One workflow instead of three disconnected systems
A private credit valuation workflow should feed borrower financials and covenant test results directly into the fair value mark. In a disconnected setup, one repository holds borrower reporting while a separate tracker calculates covenant compliance. Analysts then copy the same borrower figures into valuation workbooks, creating conflicting versions of the inputs.
Lumonic keeps those records in a credit-native data model. The platform ingests compliance certificates and traces each extracted figure to its source cell. Amendment-aware covenant tracking records step-down schedules and waiver periods while preserving borrower-specific definitions. Valuation analysts can therefore use the same underlying financials and loan terms that support the compliance calculation.
The valuation model consumes that data directly. Avante Capital Partners uses quarterly portfolio review data validated in Lumonic as inputs to its valuation models. This approach turned valuation from a separate manual effort into an extension of the review process, improving consistency, auditability, and efficiency without reducing the depth of analysis. For funds that model in Excel, live Lumonic formulas refresh those inputs each cycle, and every value carries a traceback to the source document that a reviewer can open.
Shared data keeps covenant and valuation records consistent when loan terms change. For example, an amendment may revise covenant definitions or thresholds. A standalone covenant tracker can reflect the new threshold while the valuation workbook continues using an older EBITDA definition. Lumonic connects each amendment and its supporting documents to covenant calculations and fair value work, so reviewers can identify which terms and figures supported a mark.
Lumonic's published customer results report that review preparation fell from two or three weeks to two or three days. According to other Lumonic case studies, automated testing eliminated more than 20 hours of intern work per cycle, while compliance delinquency, previously affecting 30–40 percent of borrowers, fell to near zero.
For valuation committees, source traceability makes review more direct. A reviewer can move backward from a fair value mark to the supporting compliance and loan records without reconciling separate systems first. Analysts spend less time proving where an input came from and more time assessing whether the selected methodology and assumptions remain appropriate.
Evergreen and interval funds: supporting monthly NAV cycles
Evergreen and interval fund managers must complete valuation closes more often than managers following a traditional quarterly cycle. Hamilton Lane’s SCOPE evergreen credit fund, for example, calculates valuations monthly and submits them to its valuation committee for review and approval. Some of the firm’s interval funds also conduct quarterly repurchase offers of at least 5 percent of shares, which ties current portfolio marks to recurring investor transactions.
Fund growth increases the volume behind each NAV strike. Evergreen assets across private markets reached approximately $700 billion in late 2024, up from roughly $200 billion in 2020. Semi-liquid fund assets nearly tripled over the same period to $349 billion. A valuation process built for four closes per year can struggle when the fund requires twelve.
Redemption requests make timely and supportable marks more consequential. Fitch data summarized by Crystal Capital Partners show that redemption requests across non-traded BDCs averaged 12.3 percent in the first quarter of 2026, more than twice the typical 5 percent quarterly cap. Outflows increased 48 percent from the prior quarter. Funds may scale requests back under their governing terms, but managers still need a current NAV to administer repurchases and communicate with investors.
Monthly NAV operations require software that compresses preparation time without weakening review. You should not have to rebuild linked workbooks or reconcile model versions before every committee meeting. Lumonic connects borrower financials and covenant data with fair value marks, so each monthly cycle can reuse governed inputs and documented approvals. Excel valuation models built on live Lumonic formulas refresh at each strike instead of being rebuilt, and Lumonic’s Model Context Protocol (MCP) connection can write those formulas into a workbook on request. Valuation professionals still make the judgment, while the software reduces the repeated preparation that would otherwise require more analyst capacity as the portfolio grows.
Staying audit-ready under ASC 820 and SEC Rule 2a-5
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Private loans often depend on unobservable inputs, but managers must still apply that market-participant framework. Valuation records should therefore explain the assumptions behind each mark rather than preserve only the final value.
SEC Rule 2a-5 requires four components for a good-faith fair value determination. A fund must assess valuation risks and establish and apply appropriate methodologies. The fund must also test those methodologies and oversee any pricing services it uses. For private credit, methodology testing can compare prior assumptions with later loan outcomes and valuations. Pricing-service oversight requires documented vendor review and investigation of material differences between internal and external marks.
A fund board may perform fair value determinations or appoint a valuation designee, typically the investment adviser. The designee applies the valuation program and reports to the board at least quarterly. The board selects and oversees the designee, reviews reporting, and retains ultimate responsibility for the valuation process. Funds must keep written valuation policies and supporting records available for at least six years.
Auditors and examiners need a traceable path through each valuation. For a loan mark, the record should connect the approved value to its model and supporting loan records. Amendments must flow into the relevant cash-flow and covenant assumptions. Committee approvals should record who changed each input and why, along with the supporting evidence.
Third-party valuation work also requires a documented reconciliation. Your records should show both values and how the committee investigated and resolved any difference. A difference caused by a revised recovery assumption requires different evidence than one caused by stale borrower financials. Saving only the final committee mark removes the reasoning that an auditor needs to inspect.
A connected data model can preserve valuation evidence without requiring you to reconstruct records from linked spreadsheets or separate systems. Lumonic extracts every number from source documents with automated health checks, and each figure that reaches a valuation model carries a traceback to the document it came from. When you test a methodology or review a pricing provider, you can follow each assumption back to its source and preserve the resulting decision without rebuilding the record during the audit.
An evaluation checklist for choosing valuation software
Use the same representative loan, source documents, and close calendar when testing each vendor. Record whether the vendor demonstrates each capability in the product or relies on manual work outside it.
Can the software support both yield analysis and DCF to term loans, revolving facilities, and unitranche positions? Ask how you can choose and document the methodology for each position.
How deeply does covenant tracking connect with valuation? Test whether updated borrower and covenant data flow directly from compliance certificates into the mark.
Can every valuation input be traced back to its supporting document? Select an EBITDA adjustment or interest-rate assumption and ask the vendor to trace it back to the relevant borrower financial statement or credit agreement provision.
How much can the software compress your quarterly or monthly close? Give the vendor your current close calendar and ask which steps the software automates and where manual review remains.
How does the software compare internal marks with outputs from third-party valuation firms? Ask whether it records each variance and its supporting review without relying on a separate reconciliation workbook.
What happens after the valuation committee approves a mark? Confirm that approved values and supporting data pass cleanly into fund accounting and LP reporting without rekeying information.
Can the software preserve an audit-ready record of each fair value determination? Ask how it retains a complete methodology and approval record with source evidence for the required period.
What implementation work falls on your staff? Ask the vendor to map one real borrower package and valuation model so you can assess the initial setup and ongoing maintenance.
Getting started with Lumonic
If you are evaluating a move beyond linked workbooks, you can explore Lumonic through a tailored demo.
Use the session to decide whether Lumonic can replace disconnected credit workflows without forcing debt positions into an equity-first model.
FAQs
What is the difference between yield analysis and DCF for loan positions?
Yield analysis estimates fair value by discounting a loan’s contractual cash flows at the yield a market participant would require for its risk profile, while a DCF discounts projected loan cash flows and recovery proceeds. Analysts run either approach in Excel and select the method suited to the loan structure; Lumonic supplies the model inputs through live formulas that refresh from validated borrower and covenant data.
Can Excel still work for a small private credit portfolio?
Excel can support a small portfolio with consistent reporting and centrally controlled quarterly models. Lumonic becomes relevant when linked workbooks require repeated updates or cannot trace a mark to its source documents. Centralized version control reduces broken references and conflicting model copies.
What does SEC Rule 2a-5 require of a valuation designee?
SEC Rule 2a-5 requires the valuation designee to assess valuation risks and apply and test the fair value program. The designee must also oversee pricing services and report quarterly to the board. Lumonic can keep valuation records and source documents within a traceable workflow. Organized records help the designee support board reporting and the required six-year retention period.
How do monthly NAV strikes change the close process for evergreen funds?
Monthly NAV strikes compress the full valuation and approval process into a recurring monthly schedule. Lumonic connects borrower financials and covenant results with each valuation cycle. A shared record reduces repeated data preparation. Analysts can spend more of the shorter close window reviewing assumptions and exceptions.
How are internal marks reconciled with third-party valuation firms?
Reconciliation compares the two marks and documents how the committee resolved differences in inputs or methods. Lumonic can preserve both valuation versions with their source evidence and approval history. Controllers and auditors can follow each variance back to the evidence supporting each party’s valuation.
