Reconsidering the Use of CEFs as a Proxy for DLOC The market pricing of publicly traded closed-end funds based on net asset values is not a reliable proxy for estimating discounts for lack of control for closely held businesses having a portfolio of marketable securities. Despite the acceptance for decades by the highest courts of this valuation method, the author, in this article, sets forth the basis for ...

Applicable to Real Estate Holding Companies (Part I of II) In this two-part series, the author discusses real estate holding companies and describes the use of minority discounts (also known as the discount for lack of control [DLOC]) in the valuation of partial, non-controlling interests in entities holding real estate as their primary and most valuable asset. Part II will address the use of the discount f ...

Moving Forward when Valuing Asset-Intensive Operating Companies In this article, Heidi Walker, the author, revisits the Tax Court and Ninth Circuit’s unpublished decision in Estate of Giustina and the Supplemental Memorandum Opinion issued by the U.S. Tax Court this past year. ...

Last spring we observed that 2015 would likely mark a turning point in portfolio valuations.  With Q4 earnings season beginning, we take an opportunity to check in on portfolio marks and market sentiment over the year.  Travis W. Harms, Mercer Capital’s Financial Reporting Valuation Group lead, explains the key takeaway from the year. To read the full article in Mercer Capital's Financial Reporting Blog, cl ...

M&A is an infrequent occurrence among business development companies (BDCs). “Under the external management model, the opportunity for material cost savings is limited, and prices at or near NAV indicate that investors assign little ‘franchise’ value to the lending and origination platforms.” Travis W. Harms, of Mercer Capital’s Financial Reporting Valuation Group, discusses the recent acquisition of MCG Ca ...

and the Process for the Valuation of a Closely Held Business (Part 1 of 2) Assessing shareholder value for either publicly held or privately held companies are two sides of the same coin. The U.S. capital markets have undergone significant changes in the past several years. This development in turn has had an impact on how these two types of companies are valued. Valuing public companies can be rather strai ...

Understanding Both Sorts of Appraisal is Critical to Valuing Minority, Partial Interests in Holding Entities that Own Real Estate and Other Assets that are Gifted, Sold, or Otherwise Transferred   Randolph Glennon, MAI, CRE, MBA, and president of Eastern Appraisal & Consulting in Portland, Maine, explains in the New England Real Estate Journal why there's growing need for appraisers who understand both ...