Fair Value Challenges in the Private Equity Industry精品.pdfVIP

Asset Management Fair value challenges in the private equity industry 2009 update December 2009 Summary Valuation remains at the top of the agenda for private In this paper, which follows our publication last year equity firms and reflects increasing demands for more titled “Fair value challenges in the current environment”, information and transparency from investors. This is we provide our detailed thoughts on the Updated at a time when valuation of private equity investment Guidelines and general observations relevant for continues to be extremely challenging given market upcoming 2009 year-ends including views on the volatility and few transactions. treatment of debt which is attracting particular interest at the moment. It was in this environment that the Updated Private Equity Valuation Guidelines (“Updated Guidelines”) were In summary, the strong rebound in public equity released by the International Private Equity and Venture markets may not necessarily translate into private Capital Valuation Board (the “Board”) on 9 September equity valuations given the continued challenging 2009 with immediate effect, replacing the previous 2006 trading conditions. In this context, we believe that version of the Valuation Guidelines (the “Guidelines”). current earnings performance, potential covenant breaches and future earnings prospects will come We also note that the current draft EU directive under much scrutiny for 2009 year-ends. Private equity on Alternative Investment Fund Managers (the firms will need to