Reuters London – Hedge funds are starting to move back to the practice of marking complex structured credit instruments to their financial models because market prices are unreliable, says financial advisory firm Duff & Phelps.

James De Bono, managing director at Duff & Phelps, London, which helps hedge funds and banks value assets, told Reuters in an interview that funds are moving to marking to model because in illiquid markets the range of broker prices can be too wide to be very meaningful.

The valuation of hedge funds’ holdings has become an increasingly important issue as liquidity dries up for some assets markets while hedge funds themselves face redemption pressures.

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