Private vs Public Market Valuations - Who is right?
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Persistent inflation over recent years has meant higher interest rates. In 2022, this started to be priced into the bond markets and public equities. Whilst public markets have come down, private market valuations have remained elevated. This is happening because GPs value their own book using a mix of DCF, M&A comps and public comps. Write downs are only happening, if there has been some sort of adverse event i.e. a VC-backed company running short of cash is forced to raise capital at a heavily discounted valuation.
Private vs Public Market Valuations - Who is right?
Private vs Public Market Valuations - Who is…
Private vs Public Market Valuations - Who is right?
Persistent inflation over recent years has meant higher interest rates. In 2022, this started to be priced into the bond markets and public equities. Whilst public markets have come down, private market valuations have remained elevated. This is happening because GPs value their own book using a mix of DCF, M&A comps and public comps. Write downs are only happening, if there has been some sort of adverse event i.e. a VC-backed company running short of cash is forced to raise capital at a heavily discounted valuation.