Guidelines go global

Private equity valuation guidelines have been endorsed in the farthest corners of the world - but not in the US.

In the time since their launch, the promulgation of the International Private Equity and Venture Capital (IPEV) Valuation Guidelines has steadily caught on, first in Europe, and increasingly around the globe.

Originally developed by France's Association Française des Investisseurs en Capital, the British Venture Capital Association and the European Private Equity and Venture Capital Association, the IPEV guidelines have now been endorsed by 30 regional and national private equity associations as of May 10, 2006.

The IPEV guidelines, launched in March 2005, aim to create consistency in the way private equity investments are valued and are based on ?the overall principle of ?fair value? in order to be consistent with IFRS and US GAAP,? according to the organization's website.

Similarly, the valuation guidelines issued by the Private Equity Industry Guidelines Group (PEIGG) – which is meant to adhere to US GAAP accounting standards – have also gained momentum since their issuance at the end of 2003.

One of the most recent groups to join in on the push for fair value is the Emerging Markets Private Equity Association (EMPEA), whose board of directors voted on May 10 in favor of endorsing both the IPEV and PEIGG guidelines. Others that have officially endorsed the IPEV standards comprise a motley mix that includes the private equity associations of Germany, Tunisia, Hong Kong, and Quebec (see list).

Still absent – and conspicuously so – from the list is the National Venture Capital Association (NVCA), which acts as an advocacy and trade group for the venture capital industry in the United States. While NVCA has recommended that its members include a review of the PEIGG standards when evaluating their approach to valuation methods, the association has not offered a formal endorsement of either the PEIGG nor IPEV standards to date.

While it is not yet apparent if and when NVCA will offer its endorsement to these valuation guidelines, there are clear indications that the momentum for signing off on the guidelines continues to build across many parts of the world.

Associations to have endorsed valuation guidelines

AIFI – Italian Private Equity and Venture Capital Association

APCRI – Portuguese Private Equity and Venture Capital Association

APEA – Arab Private Equity Association

ASCRI – Spanish Private Equity and Venture Capital Association

ATIC – Tunisian Venture Capital Association

AVCA – African Venture Capital Association

AVCAL – Australian Venture Capital Association

AVCO – Austrian Private Equity and Venture Capital Organization

BVA – Belgian Venturing Association

BVK – German Private Equity and Venture Capital Association e.V.

CVCA – Canada's Venture Capital and Private Equity Association

CVCA – Czech Venture Capital and Private Equity Association

DVCA – Danish Venture Capital Association

EMPEA – Emerging Markets Private Equity Association

FVCA – Finnish Venture Capital Association

HKVCA – Hong Kong Venture Capital Association

HVCA – Hungarian Venture Capital and Private Equity Association

ILPA – Institutional Limited Partners Association

IVCA – Irish Venture Capital Association

LAVCA – Latin American Venture Capital Association

LVCA – Latvian Venture Capital Association

NVCA – Norwegian Venture Capital & Private Equity Association

NVP – Nederlandse Vereniging van Participatiemaatschappijen

PPEA – Polish Private Equity Association

Réseau Capital – Québec Venture Capital and Private Equity Association

RVCA – Russian Private Equity and Venture Capital Association

SAVCA – Southern African Venture Capital and Private Equity Association

SECA – Swiss Private Equity and Corporate Finance Association

SLOVCA – Slovak Venture Capital Association

SVCA – Swedish Private Equity and Venture Capital Association

ComVentures hires chief counsel
ComVentures, a venture capital firm based in Palo Alto, California, has hired Rodi Guidero as its chief counsel. Guidero joins ComVentures from VantagePoint Venture Partners, where he was the firm's general counsel. Before joining VantagePoint he was associate general counsel for online brokerage E&#42TRADE. Guidero began his legal career at law firm Brobeck, Phleger & Harrison. At ComVentures, Guidero will be responsible for managing the structure and execution of deals and exits for the firm, as well as overseeing the firm's general legal affairs. In a statement, Guidero said, ?I've had the opportunity to work closely with ComVentures both as external counsel and as a co-investor over the course of my career and have been consistently impressed?? ComVentures specializes in communications companies, including Internet, infrastructure and mobile communications ventures. The firm has $1.5 billion (€1.2 billion) in capital under management.

CMEA hires Haag as CFO, COO
CMEA Ventures, a San Francisco-based venture capital firm, has named John Haag as chief financial officer and chief operating officer. Haag joins the firm from Burrill & Company, a San Francisco life sciences merchant bank. Prior to joining Burrill, Haag was with Softbank Emerging Markets, a joint venture between Softbank and the International Finance Corporation. In a statement, CMEA managing director Faysal Soail said, ?John brings our team the perfect combination of an extensive finance background as well as heavy operational experience?? CMEA invests in early stage and late stage companies within the information technology, life sciences and alternative energy sectors. The firm has $771 million (€600 million) in capital under management across six funds.

Rubenstein: ?Others? will list funds
The Carlyle Group co-founder David Rubenstein, speaking at the International Finance Corporation's Global Private Equity Conference in Washington DC last month, said the recent Euronext IPO from Kohlberg Kravis Roberts will ?dramatically change the face of the private equity world as we know it.? Rubenstein, referring to KKR's $5 billion raised on the public market after having first sought to raise $1.5 billion, noted the longterm appeal of the KKR vehicle. ?You'll see others doing the same thing,? Rubenstein said. Meanwhile, a partner at a major US private equity investment advisory said his phone has been ?ringing off the hook? due to calls from general partners who want to know how limited partners may react to the pursuit of similar listings. ?People are filing as we speak,? said the advisor.

PAMA and EMP unite in Asia
PAMA Group, formerly Prudential Asset Management Asia, has merged with US-headquartered emerging markets private equity firm EMP Global to ?aggressively position? the latter firm's Asia operations. Financial details of the merger were not disclosed in a press statement. PAMA chief executive and chairman Michael Kwee will head up EMP's Hong Kong-based operations in Asia. Kwee will serve as vice chairman of EMP Asia alongside EMP chairman Moeen Qureshi, who will act as chairman of EMP Asia. The institutional roots of PAMA date back to 1986, when the firm was established as a division of Prudential Insurance. Prior to its affiliation with the insurer, the firm was wholly owned by Kwee. PAMA went through a management buyout in 2000. It has offices in Hong Kong, Singapore, Malaysia and Japan. EMP manages $6.5 billion, mostly in infrastructure-related funds targeting Africa, Asia and Latin America.