What are the common use cases for privateMetrics®?

Answer

privateMetrics® provides the best state-of-the-art tools to perform the valuation of any private company.

Usually, the valuation of an illiquid asset such as a private company relies on:

1. Infrequently observed transactions in similar private companies.

2. Recent transaction data from quite dissimilar private companies.

3. Valuation of publicly listed comparable companies.

All these methods have several disadvantages including staleness, lack of robustness, and irrelevance. Any application of the above three methods, thus requires careful, expert, and subjective adjustments to be made, thereby making valuation an art rather than a science.

However, privateMetrics® can help overcome all these issues by providing an anchor for valuation, allowing customisations, and providing references for valuation comparisons.

1. A valuation anchor: By frequently valuing several hundred thousand private companies every month based on objective factor prices obtained from numerous observed transactions in private markets, privateMetrics® provides a robust, accurate, and granular starting point (or anchor) for the valuation of any private company.

2. Customisations: Moreover, due to the use of the factor model approach, the anchor can be adjusted for asset-specific characteristics (i.e., precise factors), thus allowing further customisation of the anchor.

3. Reference: Finally, the customised valuation metric, and more generally, the indices and benchmark, provide a robust reference for comparison of the valuation of the private company.