International Private Equity Valuations Guidelines for valuations undertaken in current market conditions

While many of the world’s economies struggle under the impact of Covid-19, the International Private Equity Valuations (IPEV) Board has issued guidance for advisors, investors and companies to ensure valuations sought at this time remain fair and accurate.

The guidelines, which the IPEV advise should be ‘consistently applied across all investment types, industries and stages of investment (early stage, mid stage and late state)’, are designed to provide more transparency and information for companies and investors as they navigate the current market volatility.

Underpinning the guidelines is the message that ‘strong valuation processes should continue to be followed’ and, that even in difficult market conditions, ‘fair value does not equal a “fire sale” price’.

Instead, IPVC state that ‘fair value represents the amount that would be received in an orderly transaction using market participant assumptions in the current market environment.’

This advice highlights the need for valuations to be undertaken in the context of current market conditions but also to ensure that the underlying value of a company’s assets are acknowledged and accounted for. EverEdge is aware of, and complies with, these guidelines within its valuations practice.

The full guidelines are available here.

 

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