Portfolio Valuation

For private equity, private credit, and venture capital funds, the valuation of their portfolio of illiquid investments is a cornerstone of their operations. Accurate, independent, and defensible valuations are essential for transparent reporting to Limited Partners (LPs), meeting stringent audit and regulatory requirements, and informing strategic decisions regarding the fund’s assets.

Our Role

Aether provides specialist, independent portfolio valuation services to fund managers. We deliver periodic (typically from daily to annually) fair value assessments of private and illiquid investments (Level 3 assets), ensuring full compliance with prevailing accounting standards and industry best practices.

IFRS 13 Fair Value Measurement and ASC Topic 820

The International Private Equity and Venture Capital Valuation (IPEV) Guidelines

Under IFRS 13 and ASC 820, we measure fair value as the price we’d receive to sell an asset in an orderly transaction. For Level 3 assets, we rely on unobservable inputs and apply market or income approaches, ensuring transparency and robust documentation given the subjectivity involved.

The Aether Advantage

The valuation of illiquid assets is inherently subjective and requires significant judgment. For a fund manager, demonstrating that this judgment is applied objectively and consistently is paramount to maintaining the trust of investors and satisfying auditors.

Independent and Defensible Valuations

By outsourcing portfolio valuation to Aether, fund managers gain a critical layer of independence. Our valuations are objective and free from the potential conflicts of interest that can arise from internal valuation processes. Our reports are meticulously documented, detailing the methodologies used, key inputs, and underlying assumptions. This provides a robust, audit-ready valuation that gives LPs and regulators confidence in the integrity of the fund’s Net Asset Value (NAV).

Methodological Expertise

Our team has deep expertise in applying the valuation techniques most appropriate for private capital investments. We move beyond simplistic approaches to employ the full range of methodologies recommended by the IPEV Guidelines, including calibrating to recent transaction prices, applying appropriate market multiples, and using Discounted Cash Flow (DCF) analysis. For early-stage or complex capital structures, we are adept at using more advanced techniques such as the Option Pricing Model (OPM) or the Probability-Weighted Expected Return Method (PWERM) to accurately reflect the value of different securities.

Confidential Consultation

To ensure your portfolio valuations are independent, compliant, and defensible, please contact our experts.