5 Times To Request A Portfolio Valuation

Posted on: 9 March 2023

Placing a value on equities is an essential part of having a portfolio. Firms need portfolio valuations in a wide range of situations, too. You should ask a third party to assess your company's portfolio value at any of these five moments.

Corporate Changes

Businesses frequently merge with others or acquire them. Likewise, you might spin part of your business off. In some cases, you may even decide to shut part of a business or a fund down. During any of these corporate changes, there will be questions about portfolio valuations. Before you can start putting dollar figures into contracts, you need a thorough, verifiable, and independent valuation to support the math.

Valuations are also relevant during restructuring efforts and bankruptcies. The strength or weakness of the portfolio may determine how viable a firm's plans for navigating challenging financial circumstances are.

Exit Planning

Many corporations also make investments in other enterprises. Companies take stakes in lieu of debt, for example. Also, they sometimes invest in others because they think there are exciting development and licensing opportunities. Good investments, like all things, do come to an end.

If your organization is ready to exit a position, especially one in private equity, you need to have a plan. A key part of that plan is private equity valuation. Once you have a number, you can move forward with selling or changing your stake.

Measuring Performance

Perhaps you're happy to stick with your equity positions. You still need to know how they're performing. Portfolio valuations allow corporations and fund managers to keep tabs on their assets. They can then include this information in financial reports so stakeholders will understand the current situation and future prospects. Such reports are often very useful at family offices of high-net-worth families with significant equity positions.

Venture Capital

Entering a position also presents some challenges, especially if you're coming in as a venture or angel investor. Private equity valuation can be particularly tough when you're trying to project what the risk-adjusted value of an early-stage company might be. Arriving at a valuation range will give you a better sense of the potential risk-reward payoff before you decide whether to invest capital.


Private equity valuations factor into estate plans, gift taxes, transfer prices, and capital gains taxes. You want to know that you and your firm are paying only your fair share when the tax bill comes due.

For more information, contact a professional to conduct portfolio valuations.