Alternative assets valuation and valuation oversight: private equity

Private equity as an asset class has raised significant interest from institutional and individual investors over the past year. Private equity funds are often seen as resourceful way of funding companies of various sizes and nature, with an attractive expected risk-adjusted return.

Prices, implied in a theoretical transaction, are not directly - if not at all - observable, as private equity investments are not quoted by nature, which makes the fair valuation assessment an inherent challenge.

Fair valuation of private equity investments, including strength and reliability of the valuation process, is an ever-increasing area of focus for investors, accounting standards setting bodies, auditors and regulators in the context of unprecedented market conditions and a challenging global economy.

PwC Luxembourg has developped this course to explore with participants the common valuation methodologies and techniques used in performing fair valuation assessment of private equity investments together with the corresponding inherent challenges of this asset class.

This course is a component of our Alternative valuation curriculum.

By the end of this training, the participants will be able to:

• obtain a comprehensive knowledge on valuation concepts specific to private equity assets;
• understand recognised methodologies (including valuation allocation techniques) and apply them.

• Key concepts in business valuations
• Recognised valuation methodologies
• Quote price in the context of a Private Equity/Venture Capital asset valuations
• Market multiples
• Transaction multiples
• Discounted cash flows
• Price of recent investment as an input in the calibration exercise
• A case study

This training is coordinated by Talat Kadret, Audit Partner in the Alternative department of PwC Luxembourg.

Talat is a partner in the Audit department. Since joining PwC in 2007, he has gained experience in both medium side and international assignments. In particular, he has developed strong skills in auditing investment funds with a large focus on the private equity and venture capital industries. He is also leading our Alternatives' Valuation Services practice. Talat is currently focussed on private equity/venture capital through the audit of several structures organised under various types of companies (SICAR, SIF, RAIF, SCSp, holding) as well as through the review of the valuation of the funds participations (review of the fair market value using different valuation methods, application of the IPEV guidelines, etc.). The session is presented by PwC subject matter experts dealing on a daily basis with alternative assets valuation topics.

Alexandre joined PwC Luxembourg in September 2014 and is responsible for the real estate & infrastructure advisory services within our Alternatives' Valuation Services practice. Alexandre has been active in the real estate market, and has gained a strong experience through his roles as consultant and valuer. He leads a team dedicated to the annual review of more than 1,500 assets in real estate, debt (backed by real estate collaterals), infrastructure and forestry with an exposure on world markets. Alexandre is responsible for the set-up of risk management tools for funds investing in alternative assets (real estate, infrastructure, real estate debt). He is also an active member of the Royal Institution of Chartered Surveyors (RICS).

Alix is an audit director in the Alternatives' Valuation Services department at PwC Luxembourg within the Assurance Alternatives practice. He currently specialises in reviewing valuation models and assumptions used for private company equity and private debt valuations for financial reporting purposes. Alix has performed business valuations for a variety of purposes, including fair value accounting, impairment testing and deferred tax asset recoverability assessments. In his role, Alix has exposure to a range of valuation methodologies such as discounted cash flow models, trading and transaction multiple valuations, milestone analyses, and NAV as a practical expedient. He holds the Chartered Financial Analyst (“CFA”) designation and is a CPA licensed in the state of Massachusetts.

Samir joined PwC in 2012 and is a director within our Alternatives Valuation Services (AVS) practice. He has developed expertise of the private equity industry in the context of assurance engagements, with a focus on business valuations & modelling. He developed an extensive knowledge and set of skills on valuation processes, techniques, and market practices along with the relevant auditing skills. Samir helps lead our AVS practice in managing and delivering a diverse range of alternative investments/assets valuation engagements in the context of assurance and non-assurance services to local and international clients and PwC offices. He has exposure to a wide range of valuation methodologies such as discounted cash flow models, trading and transaction multiple valuations, net asset value approach as well as milestone analyses, primarily in the context of financial reporting. Samir is Chartered Financial Analyst (CFA) and Chartered Valuation Surveyor (MRICS).