Private Equity International | How Private Equity Valuations Measure Up
Feb 2023
Originally posted by Private Equity International on February 28, 2023.
Private equity firms have been navigating market volatility for the past 12 to 18 months, and public market valuations have decreased, in certain sectors, by approximately 50%. Valuations are a key tool used to determine the fair value of general partners’ portfolios.
As a result of the COVID-19 pandemic and unrest in Ukraine, the International Private Equity and Venture Capital Valuation released updated valuation guidance, outlining the potential impact valuations may face in turbulent markets as well as other considerations for debt instruments, bridge financing and structuring impacts. The guidelines emphasize that the premise of fair value remains the same and valuation processes should remain consistent, even during times of volatility.
Richard Olson, Managing Director in Lincoln’s Valuations & Opinions Group, commented, “We always take a ‘facts and circumstances’ approach to any valuation. And that means taking an appropriate approach to determine fair value.”
Additional insights on the valuation process are outlined in the original article.
Summary
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Lincoln International’s Richard Olson shares with Private Equity International that utilizing a facts and circumstances approach to valuations is crucial when determining fair value.
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Contributor
Communication and critical thinking are paramount to meeting the needs of my clients both today and in their future.
Richard Olson
Managing Director & Head of Valuations, Europe
LondonMeet Professionals with Complementary Expertise
I find immense fulfillment in enabling clients to achieve their objectives and navigate the complexities of today's ever-changing landscape.
Chris Croft
Managing Director & Co-head of Transaction Opinions
New York
I enjoy sharing insights about market and valuation trends with my clients, while also leading a differentiated and high-touch process.
Brian Garfield
Managing Director & Head of U.S. Portfolio Valuations
New York
I enhance my clients’ decision making and governance processes by providing independent and objective financial advice in a highly responsive manner.
Chris Gregory
Managing Director & Co-head of Transaction Opinions
New York
I enjoy the opportunity to provide clients with insightful and unbiased advice that will help them make the most informed decisions possible.
Ron Kahn
Managing Director & Co-head of Valuations & Opinions
Chicago
