This article proposes a factor model approach that robustly explains the valuations observed in private market transactions, effectively addressing the biases inherent in appraised or estimated valutations.
P&I Supplement: Research for Institutional Money Management
This supplement highlights shortcomings in the valuation of infrastructure assets and suggests improvements, presents an innovative model based on real transaction data for private company valuation, explores underlying risk factors in private equity, and assesses the impact of fund scale on performance.
IPE Supplement: EDHEC Infrastructure & Private Assets Research Insights
In this supplement, we identify governance gaps in infrastructure asset pricing and propose reforms, introduce a dynamic, transaction-based valuation model, examine systematic risks in private equity, and analyse how fund size influences performance.
Market Risk in Private Equities: The Prominent Role of Systematic Risk Factors
This paper investigates market risk in private equities, with a focus on asset-level risk rather than the fund-level risks typically associated with private equity investments.
NAV 2.0: A better asset pricing model for private infra
CAPM may be ‘one of the founding frameworks of modern finance’, but for determining the net asset value of unlisted infrastructure it is terribly inadequate. Frédéric Blanc-Brude, the director of the EDHEC Infrastructure Institute explains why and offers an alternative. Originally published in Infrastructure Investor. When reporting the NAV of unlisted assets like infrastructure using discounted cashflows, best practice consists … Read More
The Valuation of Private Companies: Asset Valuation and the Dynamics of Private Markets
This paper proposes a factor model based solution that, when calibrated with transaction data and novel risk factors, can transform sparse, noisy, and biased transaction data into meaningful information that aids asset allocation, benchmarking, and monitoring of private investments.
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