Fund Valuations - Merchantec Capital

Merchantec Capital has vast experience in providing independent valuations of funds and their underlying investments as well as investment holding companies. These funds and companies are often composed of a collection of diverse investments across numerous industries.

The complexity of the fund and investment holding company structures requires a keen technical understanding of the fundamental idiosyncratic factors affecting the value.

Independent valuations of funds and their underlying investments are required for a number of reasons whether it be for funders, regulatory or management purposes. The types of fund valuations in which we specialise include but are not limited to portfolio funds, hedge funds, and private equity and venture capital funds.

In private equity and venture capital funds, the International Private Equity and Venture Capital Valuation (IPEV) guidelines recommend that best practice is to report investments at fair value. By using an independent valuation expert to accurately estimate the fair value of the fund and its underlying investments, private capital companies are better placed to make allocation, funding and strategic decisions.

Valuation Services

Company Valuations

The purpose of performing a company valuation is to gain an independent view of the estimated amount for which an asset should exchange on the effective valuation date between a willing buyer and seller in an arm’s length transaction.

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Independent Expert Report

In compliance with the South African Companies Act, 2008, companies are required to obtain an IER to provide shareholders with an opinion as to whether a transaction is fair and/or reasonable.

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Fairness Opinions

A fairness opinion is a report prepared by a JSE approved independent expert, expressing an opinion on whether a transaction is fair/unfair to shareholders.

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Purchase Price Allocation Valuation

The PPAV process is one whereby the fair value of all significant business intangible assets, including goodwill, and liabilities of an acquired enterprise must be determined in accordance with IFRS 3: Business Combinations.

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Option Valuations

Option valuation estimates the value of unique financial instruments, including share-based payments, employee incentive schemes and general share options.

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Intangible Asset & Goodwill Testing Valuation

Our team values an entity’s non-physical assets which generate a measurable economic benefit to the owner, such as customer relationships and brand. Additionally, we provide goodwill testing valuations which is an annual requirement of IFRS 36: Impairment of Assets.

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