SEC Staff Issues New Guidance on Private Credit Valuations
The SEC issued staff guidance on valuation practices for private credit investments held by registered funds.
Why it matters: Legal and compliance professionals advising in private credit markets must understand updated SEC expectations for valuation rigor and disclosure to manage risks and maintain investor trust.
- SEC Chief Accountant Kurt Hohl and Investment Management Director Brian Daly highlighted rigorous valuation and transparent disclosures on Sept 28, 2026.
- Private credit in registered funds rose nearly 60%, from $170 billion in Dec 2020 to $270 billion in Dec 2025.
- SEC emphasizes challenges due to illiquidity and lack of secondary market prices for private credit assets.
- Funds must clearly disclose valuation methodologies to investors to ensure compliance.
On September 28, 2026, the SEC's Chief Accountant Kurt Hohl and Director of the Division of Investment Management Brian Daly issued an important statement urging registered funds to apply rigorous valuation practices and maintain transparent disclosures specifically for private credit investments. This directive responds to the rapid growth and unique risks associated with private credit assets.
Private credit investments have grown significantly within registered fund portfolios, increasing nearly 60% from $170 billion in December 2020 to $270 billion in December 2025. The SEC staff warns this asset class poses valuation challenges because "private credit assets are typically illiquid, individually negotiated loans without established secondary-market trading or readily available quoted prices."
Given these complexities, the SEC's statement acts as a reminder for legal advisers and compliance professionals to ensure that funds rigorously assess private credit valuations and fully disclose their valuation methodologies to investors. This transparency is critical to managing investor expectations and maintaining regulatory compliance.
While the SEC guidance highlights the need for rigor and disclosure, details on specific valuation methodologies were not provided in the statements. Legal and compliance teams should closely monitor further SEC communications for updates and tailor their advisory practices accordingly.
By the numbers:
- $270 billion — value of private credit investments in registered funds as of December 2025
- 60% — growth of private credit investments in registered funds from December 2020 to December 2025
What's next: Legal and compliance professionals should monitor upcoming SEC updates on valuation standards and prepare for enhanced disclosure requirements.