Key issues to consider in estimating fair value at times of significant uncertainty
The COVID-19 pandemic significantly affected financial markets in the first quarter of 2020. Stock markets declined sharply, and volatility increased. The rapid deterioration in the economic environment has been accompanied by significant fluctuations in foreign exchange rates and commodity prices. The geopolitical forces have driven nominal oil prices to lows not seen since 1999. These market movements present valuation challenges to investors in private equity.
This publication sets out the key considerations in estimating the fair value of private equity investments at a time of significant uncertainty.
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