Executive summary: Valuation methods for private equity assets
INSIGHT ARTICLE |
This briefing recaps the four-part video series, Valuations in private equity. Key takeaways include:
- Most firms use three methods of valuation: public market comparisons, comparable sales transactions and discounted cash flow.
- Firms must use hard and soft measures to establish the fair value of private equity assets.
- Auditors increasingly expect firms to calibrate their valuations.
- Energy asset valuation requires a nuanced approach using discounted cash flow.
- The options pricing model of valuation can be complicated and expensive, and is rarely useful.