Three Myths of Private Market Valuations (Second of Three Parts)

We began our special series by dispelling the notion that privates should mimic publics. This week we tackle:

Myth 2: Private equity valuation processes lack objectivity and transparency, which inflates values compared to public counterparts.

For help we turn again to Ron Kahn, Lincoln International’s head of valuations. Lincoln recently published an excellent article, “Three Myths Regarding Private Market Valuations,” explaining how these valuations are determined. It also contrasts the private from BSL markets.

Ron, in our global travels over the past six months, we’ve encountered a certain skepticism about the relative strengths of private vs. public loan prices. Some institutional investors, even those with direct lending exposure in their portfolios, have a tough time believing the high marks aren’t more fiction than fact.