In the quest to garner more clients who are, simultaneously, yield-hungry and risk-phobic, firms are offering alternative fund products of all types.

That means their managers are now dealing with ever-exotic and hard to value securities: physical real estate assets; debts that come in a variety of legal formats as well as derivatives of all types, to name just a few.

This is leaving many asset managers with one question that is getting tougher to answer: How do we value all of these exotic assets? Many of these assets are ferociously illiquid, presenting major challenges for firms to develop fair value estimates.

Where asset managers see a conundrum, Philadelphia-based auditing firm BBD sees a big opportunity.

The firm is aggressively growing its investment management group, having recently named its fifth partner to this arm, and is actively courting firms in this space.

In fact, the firm has developed such a reputation in the valuing illiquid assets that financial organizations regularly feature presentations on the subject by BBD experts to their membership.

"We've made a lot of effort from the beginning to educate ourselves and become experts in this area," says Jim Kaiser, a partner in this group.

Kaiser declined to elaborate on much of the proprietary strategies for evaluation illiquid mutual fund assets, but he said these methods were developed out of years experience with a variety of fund managers. He said that BBD currently audits over 325 funds run by roughly 85 SEC registrants or sponsors.

The group is an important part of the firm's operations, accounting for nearly 60 percent of its revenues and nearly half of its 68 employees.

While the firm does occasionally hire more senior accountants from competing firms, Kaiser said that BBD's common practice is to hire talent right out of school and then train them rigorously in a single specialty. BBD's practice is to involve these young staffers in these projects as early as possible so they can gain expertise quickly.

BBD's investment management group is about a decade old, Kaiser said.

Kaiser said the firm generates most of its new business via these educational initiatives and by word of mouth. 

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