3M 2014 Annual Report Download - page 90

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84
Private placements are valued by the custodian using recognized pricing services and sources. Swaps and derivative
instruments are valued by the custodian using closing market swap curves and market derived inputs.
The private equity portfolio is a diversified mix of direct investments, derivative instruments and partnership interests
including buyouts, distressed debt, growth equity, mezzanine, real estate and venture capital investments. Partnership
interests are valued using the most recent general partner statement of fair value, updated for any subsequent partnership
interests’ cash flows or expected changes in fair value. Direct investments are equity co-investments in private companies
and projects, the majority of which are power infrastructure investments, which are valued by an independent valuation
agent.
Absolute return consists primarily of private partnership interests in hedge funds, hedge fund of funds and bank loan
funds. Partnership interests are valued using the NAV as determined by the administrator or custodian of the fund.
Generally, hedge fund partnership interests, which have a redemption right in the near term and are past any lock-up
redemption period, are classified as level 2. A hedge fund investment was moved from level 3 to level 2 during 2013
because the lock-up redemption period had expired. A hedge fund investment was moved to level 3 during 2014 after the
investment was transferred to a new share class with a longer lock-up period.
Commodities consist of commodity-linked notes and commodity-linked derivative contracts designed to deliver investment
returns similar to the Goldman Sachs Commodities Index (GSCI) or Bloomberg Commodity index returns. Commodities
are valued at closing prices determined by calculation agents for outstanding transactions.
Other items to reconcile to fair value of plan assets include the net of insurance receivables for WG Trading Company,
interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable.