Valuation Insights Q4 2023

In this issue of Valuation Insights, our Kroll experts discuss what has investors concerned and how this will impact the cost of capital that firms are facing.

We are pleased to share the September 2023 edition of the Cost of Capital in the Current Environment infographic. The infographic continues to highlight some of the global financial market and economic indicators used to support Kroll’s cost of capital inputs: recommended equity risk and accompanying normalized risk-free rate.

As new global regulatory and financial reporting standards are set, ESG investing will likely remain an important driver of investment decisions with management teams, investment firms, regulators and standard-setters. We examined the relationship between historical returns of over 13,000 publicly traded companies across a variety of geographies and industries and their ESG ratings to determine the correlation of ESG ratings to company performance in our ESG and Global Investor Returns Study.

Read about Kroll’s comments to the OECD and Inclusive Framework in response to the public consultation document concerning Pillar One Amount B.

Alternative investments are becoming more mainstream as they find their way into investment vehicles such as interval funds, ’40 Act funds, target date funds, European long-term asset funds and other investment vehicles that require monthly or daily fair-value reporting. Hear how the American Institute of Certified Public Accountants’ (AICPA) new framework, congruent with Financial Accounting Standards Board (FASB) fair value rules, allows private investment fund interests and co-investments (direct investments in private debt and equity alongside a manager) to be fair-valued on a more timely and more frequent basis.

Learn what investment managers need to know as the Common Supervisory Action (CSA) on valuation, a major regulatory initiative of the European Securities and Markets Authority (ESMA), turns its increased focus to asset valuation as a key area of investor protection. The CSA will have important implications for investment managers in terms of compliance with regulatory requirements on valuation, as well as enhancement of their valuation policies and procedures, methodologies, models, data sources and governance arrangements.

Finally, take a look at our new My Kroll Story section, which introduces some of our leading experts from around the world.

In every issue of Valuation Insights, you will find industry market multiples that are useful for benchmark valuation purposes.

We hope that you find this and future issues of the newsletter informative.