March 9, 2009

Valuing Interests in Private Equity and Hedge Funds

In our “Private Equity” Practice Area, we have posted a number of memos and articles discussing the future of the private equity and hedge fund industries. One of the articles states:

“In fact, new research from The Boston Consulting Group and the IESE Business School indicates that at least 20 percent of the 100 largest leveraged-buyout private equity firms – and possibly as many as 40 percent – could go out of business within two to three years. More disturbingly, most private equity firms’ portfolio companies are expected to default on their debts, which are estimated at about $1 trillion.”

In a somewhat unusual move, the AICPA has put out draft guidance regarding FAS No. 157, “Valuation Considerations for Interests in Alternative Investments” in which they have promised to keep all comments confidential.