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I'd go sum of the parts, and triangulate each of the portfolio companies. But I can't imagine why or even how an analyst outside of that PE fund could even attempt to do this, since none of the financials or even multiples are public...
Can't do this. Unless the fund gives you all the financials for each portfolio company, you won't have the data to do a valuation. Usually the fund will give you a valuation that they have for themselves.
Valuing private equity firms and underlying firms are two entirely different animals. Valuing firms is the easy part.
Valuing private equity fund interest can be done through two different methodologies (i) top-down (ii) bottom-up. (i) Top-Down: - less accurate: simple use of market comps (similar fund strategies, GP strength, vintage year, unfunded v funded, etc.) - more accurate: at a minimum the latest fund financials and the capital account statement; the LPA wouldn't hurt either. (ii) Bottom-Up: As noted in HarvardOrBust's comment above, you would need to review both the financials of the individual portfolio companies and the securities owned, paying close attention to liquidity pref, etc.
Probitas partners has a few documents floating around the internet on LP and direct secondary valuations.
Thanks for goods post! It's nice for us.
Ok thanks for the inputs guys. I was interested because I was looking into a boutique investment bank that deals exclusively with private equity funds. Sorry if the question was confusing was a bit vague.
^ That doesn't mean they value them or anything. They assist PE firms in LBOs and stuff like that probably
Yea...
Here was the place I was interested in: http://www.stanwichadvisors.com/
It states that they perform fundraising services for private equity partnerships, which confused me a bit. I could really see them assisting in LBOs for PEs as part of advisory services. Let me know what you guys think and always thanks for the input.
They're placement agents who do some buy side M&A on the side. They help PE fund managers raise equity investments for the purposes of the fund.
Sandhurst, do you have any specific experience with them or did you derive that from what was on the site? I was also confused about your last sentence and was wondering if you can elaborate further on it if you know further specifics.
I have never heard of them before. But if you read what they do, their primary services are all centered around marketing the client's private equity fund to investors.
Private equity funds need money to make investments. These guys help them raise that money so they can make investments.
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