Find a Professional

ServicesFind a Professional
{ Banner Photo }

GP/LP Valuation

BRG brings extensive industry-specific experience through years of working with some of the world’s leading GP Managers.

PDF

Overview

As secondary market volume for LP interests and M&A activity for GP Managers continues to grow, the need for fair value measurement of GP and LP interests is becoming increasingly more frequent. Some secular trends driving growth in LP interest and GP Manager transactions include:

  • LPs accessing secondary market to rebalance their portfolios
  • LPs buying GP Managers to utilize as investment platforms
  • I-banks divesting their GP Manager businesses to comply with the US Volcker rule
  • PE funds launching funds focused specifically on buying GP Managers
  • Founders of GP Managers looking for a succession plan as they reach retirement age
  • GPs looking to reorganize their ownership structure from a carried interest model to an equity ownership model

Services

BRG brings extensive industry-specific experience through years of working with some of the world’s leading GP Managers. Our professionals have acted as valuation advisor for numerous engagements in connection with the valuation of GP and LP interests, including:

GP Manager Valuations

  • IPO tax structuring
  • Basis for 1940 Act Test
  • Valuation of carry-for-equity exchanges
  • 83(b) filing in connection with share grants
  • Valuation in connection with a restructuring
  • Negotiations for non-hostile M&A transactions
  • Admission of new partners
  • Reporting of fair value for GP interest
  • Goodwill determination

LP Interest Valuations

  • Negotiations for secondary LP transactions
  • Transfer of interest from wind-down to new fund
  • Valuation of LP for tax reporting
  • Reporting of fair value for LP interest

Valuation Considerations

GP MANAGER LP INTEREST
Investment period Secondary market pricing
Holding period and exit assumptions Quality of NAV
Return assumptions Fund asset class/strategy
New capital raised Track record
Net flows (hedge) Fund lifecycle
Compensation and profit sharing expenses GP AUM
Normalization of terminal value GP number of predecessor funds
Allocation of expenses GP location
Differentiated risk profile by cash-flow stream GP years in existence
Key man risk  
LP concentration