GP Equity Stakes
Valuation for your equity interests.
GP Stakes Valuations
As the M&A and secondary markets for fund managers and LP interests expand, so does the need for specialized valuations. Our professionals have deep experience valuing asset managers, including private equity and hedge funds, as well as the carried interest, management companies, and GP interests of individual funds. We handle complex transaction structures and granular valuations, such as valuing a business in distinct parts (e.g., existing vs. future components). For private equity, we analyze the business's value across seven specific areas.
Driving Forces Behind GP Valuations
The demand for GP valuations is on the rise, fueled by several key market trends:
● Strategic Growth: PE sponsors are launching funds to specifically acquire stakes in other fund managers, while existing managers are expanding through strategic acquisitions.
● LP Investment Platforms: Limited Partners (LPs) are buying fund managers to use them as their own investment platforms.
● Succession Planning: Founders are seeking succession plans and valuing their carried interest as they approach retirement.
● Regulatory Changes: Investment banks are divesting their fund manager businesses to comply with regulations like the Volcker Rule.
● Ownership Reorganization: Fund managers are reorganizing their structure, moving from a carried interest model to an equity ownership model.
Services for GP & LP Valuations
Our valuation experts have a proven track record, having advised on numerous engagements for GP and LP interests. Here's a look at the situations we handle:
● Corporate & Tax Strategies: Valuations for IPO tax structuring, 83(b) filings, goodwill determination, and carry-for-equity exchanges.
● Transactions & Restructuring: Valuations for M&A negotiations, restructurings, and new partner admissions.
● Compliance & Reporting: Valuations for 1940 Act Test requirements and fair value reporting for GP interests.
LP Interest Valuations
- Negotiations for secondary LP transactions
- Transfer of interest from wind-down to new fund
- Valuation of carry for tax reporting
- Reporting of fair value for LP interest
LP and GP Valuation Considerations
- Valuation considerations