LPs are very dependent on ongoing valuations of a PE fund’s portfolio for monitoring a GP’s performance and raising issues as needed. Although most PE sponsors calculate their own funds’ valuations, an increasing number of managers are taking the extra step of hiring an independent valuation firm to assure investors and regulators that those valuations are unbiased. Independent valuation services can be very costly and take a lot of forms, however, so choosing the right firm and negotiating an appropriate scope of work is key to any effective engagement. This second article in a three-part series delves into the rise of independent valuation firms, different scopes of work and ways managers can choose the right firm to conduct valuations. The third article will explore the typical process of working with and monitoring a valuation firm, as well as for resolving disagreements over valuations. The first article considered reasons for the increasing scrutiny of valuation by investors, auditors, GPs and regulatory agencies. See “Adhering to Disclosed Fee and Valuation Methodologies Is Crucial for Fund Managers to Avert Enforcement Action” (Jan. 28, 2016); and “Four Recommendations to Help Private Equity Fund Managers Reduce the Risk of Conveying Misleading Valuation Information to Prospective and Existing Investors” (Apr. 4, 2013).