LATEST NEWS

Private equity and debt capital markets update

The new COVID-normal in private capital markets is setting in and has been generally defined by prudence and caution for investors. However, for long-term investors the Warren Buffett adage “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes” holds true as institutional investors have begun to look through the short-term volatility to take advantage of mis-pricing or investor caution across some sectors in both listed and private markets.

Locally, based on discussions with clients and other industry participants, private equity has been (and will likely continue to be) very active, deploying funds raised pre-COVID to take advantage of the opportunities in the current market across a range of sectors both private and public. Demand for private credit also continues to increase in Australia as this is a relative new asset class. Due to the relative risk-adjusted returns compared to other private markets we see this trend continuing.

Globally, some industries are still in recovery mode and being deemed too risky for material private deal activity, but those that were not materially impacted or were positively impacted by the pandemic have been the main focus of the recent deal activity.

Our US-based colleagues have prepared a good article and summary from their perspective on these markets in the US here.

OTHER NEWS

leadenhall's market discount rate update 31 March 2024

STABLE MARKET DISCOUNT RATES

Markets have declined over the last quarter as persistent inflation and the potential for further rate rises continue to weigh on the ASX 200. These fears have seen a rapid increase in government bond yields over the last month. With market conditions continuing to evolve rapidly, we have provided an update on our assessment of discount rates as at 30 September 2023.

Appraisal Foundation brief Professional Interactions Unique to Fair Value for Financial Reporting

Guidance regarding interactions between auditors and valuers

The Appraisal Foundation recently issued for comment a draft valuation brief titled Professional Interactions Unique to Fair Value for Financial Reporting. The article made several practical recommendations that are applicable to almost all auditor and valuer interaction.

Discount Rate 31 Dec 2023

Market Discount Rates – 31 December 2023

Optimism around the easing of inflation and potential interest rate cuts led to a rally in equity markets towards the end of December 2023. With markets continuing to fluctuate significantly, the selection of a reasonable discount rate remains a key consideration, whether for the purpose of financial reporting or for any valuation analysis.