Valuation ServicesPrivate Equity Services

Our Private Equity service provides independent valuation and performance reporting solutions to investors in unlisted equity and private placement or hard to value debt.

Customers

  • Private equity funds
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  • Asset managers
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  • Pension funds
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  • Insurance companies
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  • Banks
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  • Fund administrators

Statistics

  • 120+customers
  • 13,000+valuations annually
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Product summary

Our Private Equity service delivers a range of solutions for managers and investors of alternative assets, including company, share price, illiquid debt and stock option valuations as well as income attribution, methodology reviews, AIFMD valuation options and risk-adjusted performance reporting with peer group comparisons.

    Use cases

    • Private equity

      We provide objective company valuations based on a peer comparisons and a database of public company data. Our standard methodology is free from analyst bias, with all parameters determined by public peer company data and automatically adjusted based on points of difference between the portfolio company and the peer group.

    • Illiquid debt

      We provide valuations for illiquid debt and mezzanine finance using a hierarchy of valuation techniques. We use comparable issue data from Markit’s bond and loan datasets, perform fundamental analysis of issuer risk to select an appropriate sector curve and construct a list of probability weighted cashflows using client data.

    • Advisory services

      We provide income attribution reports, which allocate enterprise value across the company’s capital structure, or between SPVs in the investment hierarchy. Using our private equity and OTC valuation capabilities, we prepare stock option valuations for private companies. We can also provide information on AIFMD valuation options. Furthermore, we can perform methodology reviews, to assess third-party processes against industry standards or against our in-house methodologies.

    • Performance reporting

      We provide quarterly risk-adjusted performance reporting on a give-get basis for participating fund managers. This shows relative returns and risk-adjusted returns, with comparisons against a peer composite return and a private equity market cap index for both.

    Case Studies

    • Top 5 US private equity firm

      Issue: The customer wanted to increase its pool of valuation providers and needed daily valuations in order to attract capital from new sources, such as mutual funds.

      Solution: Markit is independent and offers a new quantitative approach to private equity valuations. We offer daily valuations for both illiquid equity and debt in high volumes, at a cost-effective price.

    • Mid-tier US private equity firm

      Issue: The customer faced pressure to manage valuation costs and required responsive customer service. It also wanted to reduce the time needed to respond to year-end audit questions.

      Solution: Markit offers a cost-effective valuation service with a dedicated support team. Our comprehensive valuation reporting provides the information to satisfy most audit queries.

    • Sovereign wealth fund

      Issue: The customer needed to adhere to strict internal governance standards.

      Solution: Following an extensive due diligence exercise, Markit was selected to be the valuation provider for the private equity portfolio due to the robustness and objectivity of our valuation process as well as the accuracy of our results.

    • Tier 1 US bank

      Issue: The customer required monthly valuations for more than 1,000 holdings and needed to manage a large number of funds, with each being valued on a bespoke basis.

      Solution: Due to the automated data gathering process and normalised valuations, we can scale efficiently. Furthermore, Markit’s standardised approach provides consistent fair value pricing and allows users to compare performance over time and across funds in a timely manner.

    Articles

    • Preqin Global Private Equity Report 2017

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    • Preqin Global Private Equity Report 2016

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    • AIFMD Valuation Regulations – Opportunity or Cost?

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    • HFM Compliance: Valuation options under AIFMD, Pageant Media

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    • Opportunities to Meet Fundraising Goals

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    • Is Outsourcing Becoming the New Norm?

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