Valuation of investments in private markets
Valuation Advisory, The Netherlands | December 2024
Valuing investments in private markets is a challenging task and affects various stakeholders, including General Partners (GPs), Limited Partners (LPs) of Alternative Investment Funds (AIFs), investors, shareholders, and banks. This complexity arises from subjective assumptions, information asymmetry and potential conflicts of interest between the managers and owners of AIFs. Additionally, the opaque nature of private fund investments adds to the difficulty in determining their value.
To navigate these complexities Alternative Investment Fund Managers (AIFMs) must adopt thorough and transparent valuation practices. The Alternative Investment Fund Managers Directive (AIFMD) and the International Private Equity Valuation Guidelines (IPEV Guidelines) provide structured frameworks for the valuation of investments in private markets.
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