As Baby Boomers begin to retire they will transfer roughly $3.3 trillion dollars worth of wealth in privately held business value in the next two decades alone, concludes a recent report issued by the National Association of Certified Valuation Analysts (NACVA) and The McLean Group, a global investment bank.
According to the white paper, The Fabled Wealth Transfer: Urban Legend or Reality?, a portion of the $3.3 trillion will go to heirs, other parts will be sold to employee organizations (through Employee Stock Ownership Plans), to management (through leveraged buyouts), or to the general public (through initial public offerings). A good deal of this wealth will also go to the IRS. In addition, authors Dennis Roberts and Steve McNaughton of the McLean Group contend that:
- Over the next 18 months, in excess of 1,000,000 privately held businesses will change hands.
- Owners, long focused on day-to-day management, are beginning to feel a sense of urgency about how to both create and appropriately assess long-term value in their businesses.
- Financial professionals—including business valuators, M&A professionals, CPAs, small business brokers, and others—are focused on developing skills and repositioning their practices to serve the most vital needs of client companies.
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