US Brokers and Asset Managers "Brownie Points: The "Day-One" Mark Up Defense"

Research evidence excerpt

US Brokers and Asset Managers "Brownie Points: The "Day-One" Mark Up Defense"

Global Research

22 May 2026ab

US Brokers and Asset Managers Equities

AmericasBrownie Points: The "Day-One" Mark Up

Defense Financial

Michael Brown

Analyst

mike.brown@ubs.com

Weekly "Brownie Points" publication highlights key points and emerging trends across +1-212-713 1387

asset mgr & brokers. Note, IB metrics tracked on the following pages.

Daniel Lehmann

Point 1: Day-One Marks in Focus on HLNE and STEP Calls Associate Analyst

Our Take: Secondaries have been getting more scrutiny lately around the long-standing daniel-j.lehmann@ubs.com

practice of marking assets up to NAV right after buying them at a discount (“day-one” +1-212-713 2391

marks). It’s coming under more pressure as the wealth channel grows, where fees can be Vijeth Mudalegundi

earned on unrealized gains—potentially boosted by those day-one marks—with no Analyst

clawback if exits come in below marks. Concerns around software valuations, plus the vijeth.mudalegundi@ubs.com

rapid growth of secondaries in wealth, seem to be amplifying the focus here. +1-212-649 8172

Mary Mahrer

Management commentary from both HLNE and STEP reinforces that so called “day- Analyst

mary.mahrer@ubs.comone” markups are largely a fair value convention of GAAP accounting, as other holders

+1-212-713 9014

of similar assets will be holding the assets at fair value NAV (not the sale/purchase price).

Both firms emphasized that the overwhelming majority of value creation is driven by Cory Johnson

post purchase asset appreciation, which supports the durability of investment returns Associate Analyst

cory.johnson@ubs.com

and should alleviate investor concerns that reported NAV gains are front loaded or

+1-212-882 0078

inflated.