Alternative investment valuation for private equity and hedge funds.
Ryan McNelley, Managing Director, Portfolio Valuation was featured in Private Funds CFO in relation to the International Private Equity Venture Capital (IPEV) update to their valuation guidelines. In December 2018, IPEV removed the use of a recent investment as an impartial tool to calculate fair value.
IPEV provides guidance for private capital valuation purposes and is referred to frequently by GPs. Ryan says the removal of at-investment cost has, “left some GPs asking questions as to how much additional work they should be doing.”
According to Ryan, firms are now posed with the questions of how to interpret the IPEV guidelines and how much work it will require to adhere to them.
Ryan says, "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. This could include performing a more traditional analysis such as a market approach or a discounted cashflow which are admittedly sometimes difficult to apply in an early-stage context."
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