Fair value index of private companies debuts

BVWireIssue #183-3
December 20, 2017

The Lincoln Middle Market Index is the first fair value index created exclusively from a population of privately held companies. Quarterly, Lincoln International (a global midmarket investment bank) determines the enterprise fair value of over 1,200 companies for approximately 100 private equity sponsors and lenders. These portfolio companies report quarterly financial results to the private equity group or lender. Lincoln obtains this information and computes the enterprise value in accordance with fair value measurement principles of GAAP, AICPA, and ASA.

As the Lincoln Middle Market Index is a fair value index (based on the fair value of private companies), it is comparable to public stock market indices such as the S&P 500 or Russell 2000. To develop it, Lincoln worked with Professors Steven Kaplan and Michael Minnis of the University of Chicago Booth School of Business. The index will be published quarterly—the current version covers the period from 2014 through September 2017, and you can access it if you click here.

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