What are some things to keep an eye open for in the valuation sphere in the last few months of the year?
“In the recent past, there are several key trends and factors that impact valuations,” the LVPA’s board members told Paperjam. These include:
—High interest rates and economic uncertainty, which “tend to negatively impact valuations by increasing the cost of capital and reducing future cash flow projections.”
—Private equity activity: “private equity firms are expected to continue influencing business valuations, particularly among middle and lower middle market companies. There’s a trend towards smaller, lower-risk firms attracting more attention from buyers.”
—M&A landscape: “the M&A landscape is anticipated to remain resilient with cautious optimism. Despite uncertainties around interest rates and geopolitical tensions, deal activity is expected to stay reasonably active. Cross-border M&A, especially in technology, healthcare, industrial, and chemical sectors, is likely to see a resurgence.”
—Creative deal structures: “to bridge valuation gaps and mitigate risks, dealmakers are likely to continue using earnouts and seller financing. These structures have been pivotal in getting deals across the finish line, especially in private transactions.”
The valuation summit will feature a keynote from Jean-François Carpantier at the CSSF and panel discussions on technology and mitigating valuation risk. Could you give us a sneak peek of the panel/talk you’re most excited about?
“In July 2024, the International Valuation Standards issued their consultation agenda, identifying three pivotal valuation topics: 1) environmental, social and governance (ESG) factors in valuation; 2) technology in valuation; and 3) valuation risk,” said the association’s board members.
“At the inaugural valuation summit in Luxembourg, the LVPA is thrilled to spotlight two of these critical topics: technology in valuation and valuation risk. These subjects will be thoroughly examined by leading valuation experts and practitioners.”
“The valuation risk panel, in particular, promises to be a highlight. It features distinguished panellists from a diverse array of asset classes and industries. They will explore various facets of valuation risk, focusing on the processes of identifying, assessing, and mitigating potential risks. The discussion will cover effective strategies to minimise the impact of these risks on valuation outcomes and underscore the crucial importance of robust valuation governance and due diligence.”
“This session is meticulously designed to offer practical insights and market practices that enhance the accuracy and reliability of the valuation function. Attendees can expect to gain valuable knowledge that will help improve the precision and trustworthiness of their valuation processes.”
The Luxembourg Valuation Professionals Association was founded in November 2022 and celebrated its first anniversary last year. How has the LVPA has grown in 2024 and why does it remain important for the Luxembourg financial sector?
“In 2024, the LVPA has seen significant growth and development. Since its official launch in November 2022, the LVPA has expanded its membership base and increased its influence within the financial sector. Currently the LVPA has over 150 individual members and 50 corporate members. The association has successfully organised numerous events, including workshops, seminars, and networking opportunities, which have attracted a wide range of valuation professionals.”
The association remains crucial for the grand duchy’s financial sector for several reasons, explained its board members. It promotes high standards of “ethics, professional excellence and expertise in valuation,” educational initiatives by providing training programmes “with the latest methodologies, regulations and best practices,” networking and collaboration opportunities and valuation governance, as it “works closely with regulatory bodies, such as the CSSF, to ensure that valuation practices in Luxembourg comply with local and international standards.”
Announced at the , the LVPA’s board consists of: Antoine Boggini, Hind El Gaidi, Rafaël Le Saux, Romain Magnin-Lambert, Elena Moisei, Samir Moussaoui, , Alexander Sidorov and .
Find the full agenda and register for the summit .