Private Equity: Forward Thrust

Private Equity, The Netherlands | Report | Q2 2024

Recovery in the Dutch M&A market during the second quarter of 2024.

M&A activity in the Netherlands

Valuing investments in private markets is a complex and crucial task that affects a wide range of stakeholders, from General Partners (GPs) and Limited Partners (LPs) to investors and banks. Unlike public markets, where valuations are more transparent, private markets face challenges like subjective assumptions, information asymmetry, and conflicts of interest. The complexity is further heightened by market opacity, making it essential for firms to adopt rigorous, transparent valuation practices.

Frameworks such as the Alternative Investment Fund Managers Directive (AIFMD) and the International Private Equity Valuation (IPEV) Guidelines provide structured approaches to valuations, ensuring consistency and fairness. However, despite these frameworks, issues still arise, especially regarding inflated or deflated valuations, which can distort fund performance, affect borrowing decisions, or impact investor confidence.

Valuations play a pivotal role not just in monitoring and reporting to LPs but also in facilitating transactions, managing financial restructuring, and settling disputes. In transactions, particularly in secondary markets, conflicts of interest may surface, making independent valuations critical. In financially distressed situations, accurate valuation becomes vital for restructuring plans and creditor decisions.

Engaging expert valuators like Oaklins can significantly improve transparency, reduce risks, and build trust. Oaklins brings deep expertise in navigating the challenges of private market valuations, from transaction and financial restructuring valuations to dispute assessments. With a proven track record, Oaklins can support Alternative Investment Fund Managers (AIFMs) with tailored advice and expert opinions, enhancing confidence in even the most complex scenarios.

For a deeper dive into the intricacies of private market valuations and how Oaklins can assist your firm, explore our full advisory services. Let us help you make informed, confident decisions in a challenging investment landscape.

Our outlook for the remainder of 2024 remains consistent: we anticipate a positive development in M&A activity. We expect a busy summer for M&A advisors, who will be finalizing pending projects and preparing processes that will be marketed post summer aiming for a transaction before the end of the year. Given that PE exits were still at a low level in Q2, we expect that the pressure for liquidity and hence PE exits will further increase. This exit pressure would not only contribute to H2 2024, but also to 2025. On a macro level, it will be interesting to see if the geo-political developments – with our new national government, the recent UK and European elections and upcoming election campaigns in the USA – will impact M&A activity. For now, we remain positive for the remainder of 2024 and 2025. TIJN BASTIAANS, PRIVATE EQUITY COVERAGE

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