The term hedge fund, as generally defined, means a pooled investment vehicle that is privately organized, administered by a professional investment manager, and available to institutional investors and high-net-worth individuals. Valuation practices have become increasingly important for hedge fund managers, investors, and regulators. Valuations seek to determine the fair values of investment positions held by hedge funds, which, in the aggregate and after fees and expenses, correspond to the net asset value of the funds. Hedge funds are difficult to value because of the variability of their revenues and risk. Yet, the general methodologies commonly used to value companies in mergers and acquisitions can be useful for hedge funds. The recent adoption of SFAS 157 is designed to lead to greater consistency in valuation practices, but deciding on the best methodology and inputs for the valuation of certain financial instruments will still involve considerable judgment and expertise.