The FTSE and other UK indices show that noncontrolling marketable interests in listed companies have increased during COVID-19 (despite the Boris discount and other factors). Business valuers working with family businesses might note that noncontrolling interests might not have fared as well.

Pre-IPO data coming primarily from the US is a widely accepted method for estimating a discount for lack of marketability (DLOM). New pre-IPO data for the first quarter of 2021 in the Valuation Advisors Lack of Marketability Discount Study should be of interest to UK analysts.

High discounts: “The pre-IPO discounts this quarter are higher than they usually are,” says Joseph Cotton of Valuation Advisors LLC, the firm that researches and provides the data for the study. “Recently, the [US] stock markets have been hitting new highs.…These factors led to higher discounts this quarter, as demand for IPO shares increased.”

For U.S. transactions, the median discount was 53.7% for the 1Q2021 zero-to-three-month time frame (compared to 39% for all of 2020 and 21.5% for all of 2019). For all transactions (U.S. and non-U.S.), the 1Q2021 zero-to-three-month time frame median discount was 51.4% (compared to 35.5% for all of 2020 and 21.2% for all of 2019).

UK discounts for minority interests have historically been slightly larger than those reported in the US.