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Valuations
While continuation vehicles may not always be the optimal solution for sponsors and LPs, other attractive liquidity solutions are gaining in popularity, writes Todd Miller, partner at W Capital Partners.
According to fresh research from Goldman Sachs, average distribution-to-paid-in multiples (DPI) for the 2019-22 vintage era is 80% lower than the equivalent 2007-14 vintage set.
Speaking at an event in Hong Kong on Wednesday, the firm's head of APAC private wealth said it is 'critical' that open-end funds are valued frequently enough to assist subscriptions and redemptions.
Expected lower interest rates, increased M&A and an improved opportunity set for exits are among reasons why valuations are predicted to begin recovering.
CFOs discussed the increased complexity – and investor scrutiny – of valuations processes in the new economic environment.
HIG filed a lawsuit earlier in the week, accusing Audax of misrepresenting the financial condition of Mobileum, in which the two mid-market firms co-invest.
Actively creating value is now front and center for managers, in the new economic climate. Riveron executives identify the most important levers for successfully driving value creation at newly acquired portfolio companies.
'Much of the work in private equity has shifted to portfolio company improvement,' says Michael Choe, CEO of Charlesbank, which invested in Accordion in September.
Relatively strong marks are pushing portfolios out of balance and forcing a discussion about why PE isn’t experiencing the kind of pain seen in the broader economy.
Rigor around the process and reporting of valuations is growing as funds become more sophisticated and as investors intensify their scrutiny, say Brendan Smith and Jamie Spaman, managing directors of Stout.