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Tuesday: Evaluating valuations

This week we discuss valuations. Find out how GPs are reacting to IPEV's most recent valuation guidelines change and what the SEC is looking at when checking out your valuation methodology.

On Tuesdays, we focus on tax, finance and accounting issues and this week we are looking at valuations.

Private Funds CFO reporter Brian Bonilla spoke to several valuations experts about how general partners in the industry have been adjusting to the International Private Equity Venture Capital Valuation Guidelines removing the use of the price of a recent investment as a standalone tool to calculate fair value.

IPEV initially removed this from the guidelines in December 2018 due to some confusion around the rule, as reported by Private Funds CFO. This change simply means GPs must do more than rely on the price of a recent investment to calculate fair value.

“For some, there may be more work to do to establish a regular practice of reviewing what’s changed, either in the macro or market environment, or with the company specifically that might suggest a change in value,” Ryan McNelley, managing director of portfolio valuations at Duff & Phelps, told Private Funds CFO.

Speaking of valuations, Withum‘s Tom Angell joined us for a sponsored video in which he discusses what the Securities and Exchange Commission focuses on when looking at a firm’s valuation methodology.

We hope to see you all today at PEI’s inaugural CFO Think Tank, a one-day closed-door event in Boston!

This email was prepared by Brian Bonilla.