Case Study: PE firm requires valuation of new fund with complex cash flow to provide for gifting of interest to family trust
A private equity firm started a new fund and wanted to gift an interest in the fund to a family trust. The private equity fund was at the initial stage of seeking capital commitments and had not yet begun investing in and deploying capital. As the fund was new, it did not have historical financial results that could be used as a predictor of future performance, thereby making it challenging to value the interest in the fund. DGC was contacted by the fund’s CFO.
DGC relied on its experience analyzing and valuing complex streams of cash flow for companies with risk and uncertainty in achieving projections. DGC prepared a discounted cash flow model, documented assumptions and wrote a valuation report for submission to the Internal Revenue Service.
DGC provided the client with a thorough and auditable valuation that enabled the gifted interest.