Markit moves into buyout valuations

The new offering is targeted at LPs, banks and fund administrators, as well as GPs, which under the Alternative Investment Fund Managers Directive (AIFMD) are required to have their fund assets independently valued.

The new service meets statutory and policy requirements for investors, regulators and business managers for independent valuation of prices to be used in net asset valuations and other key portfolio metrics.

The valuation process uses a market approach and will adjust for points of difference between the portfolio company and Markit's database of public peer company factor data. The valuations are standardised so that they can be used on a comparative basis between firms.

The valuations are based on the performance ratios of more than 30,000 public companies. The ratios, which include EBITDA, sales, net assets, gross assets and a discounted cash flow proxy, are adjusted according to the relative performance of the portfolio company's public peer to determine estimated enterprise values. A sector-specific weighting is then implemented into each estimate and the weighted estimates are combined to produce the final portfolio company valuation.

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• Topics
• Regulation
• AIFM Directive