How Accurate Are Roll-Forward Valuations?
Roll-forward valuations are commonly used in lieu of missing reported valuations. However, the error in roll-forwards is significant. Quarterly errors in recent years have been about 6% as a fraction of fund valuation. But end-of-year errors are larger: about 5% for equity fund-of-funds, 7% for real estate funds, 9% for buyout, and 10% for venture capital funds.