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Quote of the Week: Same Asset, Different Valuation

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December 14, 2012

“It’s a common problem in the PE world: two firms hold the same asset but carry it at wildly different prices. There’s nothing that irks LPs more than these sorts of discrepancies in valuation.”

 

Who said it: Jennifer Cho Rinehart, Managing Partner, MVision Private Equity Advisers

 

In Context: In a roundtable broadcast on Privcap, Cho along with Pawan Chatuverdi, Partner, Altius Associates, and Matthew Pedley of The Blackstone Group shared best practices in conducting and facilitating portfolio-level due diligence. Privcap dubbed it the brave new world of transparency in fundraising. Cho said that when valuing portfolio companies it is in the best interest of GPs not to be overly aggressive in their projections. And if a GP gets a call from an LP who questions his valuation process, he or she should give their LP the most detailed explanation possible for the rationale behind your valuation. The rest of the discussion reveals that  LP demand for data is “emboldened and undeterred” and that track record data remains the most pressing concern. Image Source: Privcap

 

Where we found it: Privcap

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