Marked to mayhem. Stewart Eisenhart takes a fresh look at the perennially challenging issues of pricing and valuations on the buy side, arguing that these functions have become all the more crucial to fund managers in the wake of the US sub-prime mortgage

Events continue to unfold, preventing any definitive forensics for now, but clearly valuation has emerged as a key area of concern for managers trading mortgage-backed and other credit products. As difficult as pricing such instruments has proven, current events have demonstrated starkly the need for greater use of third-party pricing technologies and services, and more comprehensive internal valuation processes among managers and their counterparties.

For some managers with greater credit ex