Complex Instrument Valuation

Modern corporate finance and investment structures frequently employ financial instruments with embedded optionality, contingent features, and non-linear payoffs. Valuing these complex securities—such as convertible debt, structured notes, warrants with anti-dilution provisions, and illiquid derivatives—requires sophisticated quantitative analysis that goes far beyond standard valuation techniques.

Our Role

Aether provides independent, robust, and defensible fair value measurements for a wide spectrum of complex financial instruments. Our valuations are essential for clients needing to comply with financial reporting standards (IFRS 13, ASC 820), for tax purposes, or for strategic decision-making.

Convertible and contingent convertible debt instruments

Preferred and common equity in complex, multi-class capital structures

Warrants, options, and other equity derivatives

Contingent consideration and earn-outs in M&A transactions

Structured products and other hybrid securities

The Aether Advantage

The valuation of complex instruments is a highly specialised field where the choice of model and the calibration of its inputs can have a material impact on the result. The primary value of such a valuation lies not just in the number itself, but in its defensibility under scrutiny from auditors, regulators, and other stakeholders.

Quantitative Rigour and Model Expertise

Our team possesses deep expertise in financial engineering and quantitative modelling. We do not apply a one-size-fits-all approach. Instead, we select and tailor the most appropriate valuation model to capture the unique features and risk profile of each instrument. Our capabilities include the application of advanced techniques such as Monte Carlo simulations to model path-dependent payoffs, binomial and trinomial lattice models to handle early exercise features, and sophisticated option pricing models (OPM) to allocate value in complex capital structures.

Defensible and Audit-Ready Valuations

We deliver more than a valuation; we deliver certainty. Our valuation reports provide a clear and coherent illustration of the instrument’s features, the valuation methodology employed, and the key inputs and assumptions used. This transparency, combined with the rigour of our analysis, results in a valuation that is built to withstand the most demanding due diligence, providing our clients with the assurance and confidence they require for their financial reporting and strategic planning.

Confidential Consultation

For a robust and defensible valuation of your complex financial instruments, please contact us for a confidential discussion.