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A PRIVATE EQUITY INTERNATIONAL PUBLICATION www.peimedia.com
The Definitive Guide to Private Equity Valuation

How do you value assets fairly?

The era of cost is over. Fair value or mark to market is the order of the day, but
misconceptions and misunderstandings as to what it is and how to determine the
value of assets abound. The Definitive Guide to Private Equity Valuation is an in-depth
guide to understanding, applying and reporting fair value. Primarily written by
valuation experts Duff & Phelps, this guide provides investors and fund managers
with valuable tools and practical guides to fairly value nuances and scenarios, case
studies and best practices.

Main u Exclusive material on fair value valuation guidance written by financial advisory and
valuation firm Duff & Phelps

features u An introduction to fair value why it exists and what function it serves, regulatory
frameworks, historical timeline, other uses and a prognosis for the future
u A decision tree to guide fair valuation decision-making
u Valuation nuances of the most common scenarios and accompanying case studies
u An A-Z guide of over 70 of the most common applications, from absolute return to
waterfall analysis
u Best practices on working with auditors, documentation, using third-party valuation
experts and internal policies and procedures
u Secondary market and LP perspectives

Who should buy? uF und Managers

u Investors
u Consultants
u Placement Agents
u Investment Advisers u Bankers
u Lawyers u Asset Managers

A PRIVATE EQUITY INTERNATIONAL PUBLICATION

 The Definitive Guide to Private Equity Valuation

Chapters
1.  Introduction u A-Z guide: u High water mark u Real options
by Duff & Phelps A how-to reference of over 70 of u Illiquid securities u Redemption fee
the most common applications of u Impairment u Restructuring/workout
2.  Why fair value? u Incentive fee/carried interest u Round of financing
by Duff & Phelps fair value
u Infrastructure u Significant judgment
3.  Fair value defined u Absolute return u Institutional investors u Stale value
by Duff & Phelps u Active market u Intellectual property u Stock option
u Blockage factor u Interest-bearing securities u Synergy
4.  Regulatory u Broker quote u Internal rate of return (IRR) u Tax
framework u Buyout u Investment/operational due u Transaction cost
by Duff & Phelps
u Closed-end fund diligence u Valuation hierarchy
5.  Valuation u Club deal u Leverage u Venture capital
methodology u Comparable company analysis u Liquidation preference u Volatility
by Duff & Phelps (CCA) u Liquidity discount u Waterfall analysis
u Comparable company u Lock-up (gate/suspension)
6.  Valuation nuances transaction u Management fee
by Duff & Phelps u Contingent claims analysis u Market approach
7.  Investors in u Control premium/minimum u Market participant uA
 ppendix:
private equity (minority) interest discount u Marketability discount
u Convertible securities u Mezzanine debt u Portions of FASB ASC
by Duff & Phelps
u Currency u Milestone 820 Fair Value, Fair Value
8.  The LP perspective u Debt/loan valuation u Net asset value (NAV) Measurements and Disclosures
by Probitas Partners u Dilution u Open-end fund u Portions of FASB ASC 946
u Direct investment Investment Companies,
9.  The secondary u Payment-in-kind (PIK)
u Disclosure dividend Financial Services Investment
perspective Companies
by Cogent Partners u Discounted cash flow (DCF) u Performance multiple
u Distressed debt u Political/country risk u IPEV Guidelines
10. Best practices u Distressed market u Preferred securities u PEIGG Guidelines
by Duff & Phelps u Distressed transaction u Principal/most advantageous u ILPA Private Equity Principles
11. Other uses of fair u Distribution market
u Earnout u Private securities
value u Entry price u Pro forma performance
by Duff & Phelps
u Escrow u Public market comparable
12. Fair value: The u Exit multiple u Publicly-traded securities
future u Exit price u Purchase price allocation (PPA)
by Duff & Phelps u Expression of interest u Real estate

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About PEI
PEI is the leading financial information group dedicated
to the alternative asset classes of private equity, real estate and
infrastructure globally.
Two things set PEI apart. The first is our global remit. The
industries we cover are inherently international and resolutely cross-
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from across the world. Similarly, our unique library of books and
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aspects of alternative assets and are written by seasoned
professionals from all corners of each industry.

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A PRIVATE EQUITY INTERNATIONAL PUBLICATION www.peimedia.com
Athatcommon misconception is
FASB ASC 820 changed
the rules identifying which
assets or liabilities should be
recorded at fair value.
David L. Larsen, Duff & Phelps LLC

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