John Paglia (Pepperdine University), Robert Slee (Robertson & Foley), and the Graziadio School of Business and Management at Pepperdine Univ. just published the latest results from their ongoing Pepperdine Private Capital Markets Project, a survey of privately held companies and their capital markets. Of particular interest, the majority of BV participants expect business confidence, business conditions—and BV engagements to increase over the next 12 months.
Compare those future expectations to the following snapshot of key practice indicators for the BV profession, excerpted from Slee and Paglia’s Private Capital Markets: Valuation, Capitalization, and Transfer of Private Business Interests, 2nd Edition:
Comparison: Today versus Six Months Ago
|
Decreased |
About same |
Increased |
Number of engagements |
16.1% |
26.2% |
57.8% |
Fees for services |
18.7% |
61.6% |
19.7% |
Time to receive payment for services |
9.8% |
62.0% |
18.3% |
Size of your BV department |
5.4% |
76.1% |
18.6% |
Cost of capital |
20.9% |
43.7% |
35.4% |
Market (equity) risk premiums |
20.5% |
56.1% |
23.4% |
DLOMs |
10.7% |
76.7% |
12.7% |
Company specific risk premiums |
11.2% |
67.3% |
21.5% |
In last week’s ASA E-Letter, John Borrowman (Borrowman Baker LLC) also provided insights on the current state of the BV profession:
- “Of all the service areas, litigation support has probably remained the strongest.”
- “Congress has reintroduced certainty into the world of estate planning, and brought clients back onto the playing field.”
- “Valuation work driven by the return of merger and acquisition activity is another factor contributing to the return of confidence.”