The US valuations market leads the world so seeing new trends there means they will be over here soon.<\/p>\n
<\/p>\n
As we move through this second summer of 2026, our thoughts are turning to what big themes will matter in the world of valuations for the rest of this year but also for next.<\/p>\n
Clearly the upcoming budget may have consequences for valuations, but I think, given the UK Government\u2019s growth agenda, if anything there will be more routes for companies to encourage the receipt of investment and to incentivise staff. The knock-on will be a greater requirement for defensible valuations.<\/p>\n
Interest rates may be on the rise though not necessarily growing to such a significant level (yet?) that there will be a meaningful impact on many valuations. Then there are the perennial questions of AI and the oil price.<\/p>\n
However, the big theme, far bigger than anything that could be driven by a growth agenda or macro-economic issues, is the growing awareness of the defensibility of a valuation.<\/p>\n
No longer is this just a tax issue; it is emerging in and around VCs and institutional investors with far greater attention being paid to the independence of the valuations committee vs the investment committee. In our view, there will be a growing tussle about the interpretation of what fair market value means. Only this evening I was talking to a non-UK (but still super sophisticated) VC who said his firm only changes the valuation of a portfolio company when there is a new funding round\u2026.<\/p>\n
If only because of the emergence of more secondary transactions, I believe that counterparties of all shapes and sizes will start asking more questions about how an investor sets \u201cfair market value\u201d in line with IPEV guidelines.<\/p>\n
Then there is the issue of the juxtaposition between IPEV valuation guidelines and taxation frameworks and what that will mean in establishing the price of a share, share class, company, partnership or partnership interest. It is all very curious.<\/p>\n
Watch out also for post ante M&A litigation around valuation datapoints used in a transaction.<\/p>\n
But what is the really big, nay massive, theme that we can no longer afford to ignore? It is the issue of conflicts of interest, or in layman\u2019s terms the issue of people marking their own homework in the context of reporting to investors, when it comes to reporting on equity valuations. Even if there may be some scepticism about whether an up-to-date valuation is needed when there is no liquidity event or other corporate action looming, none of us can afford to ignore the fact that on a macro basis, equity underpins debt. Global equity valuations, whether we like it or not support the whole global private debt stack. And when most equity value is held in private stocks not listed ones\u2026<\/p>\n
In the US, auditors are coming under greater scrutiny in relation to their approach to auditing the valuation of assets, particularly around challenging the assumptions used in preparation of the valuation. This puts valuers under greater pressure to get it right AND evidence every piece of data, every methodology and every assumption, but it also raises the question (a bit like the issue of the independence of an investment committee around valuations reporting) of how the intrinsic conflict of interest is managed in a situation where the audit firm also engages in the preparation of the valuation. It\u2019s another Chinese wall scenario. If, in the US, where there is a thriving independent valuation market, the issue is topical, what does this mean for the UK where still many, many articles of association demand that a valuation of the company\u2019s equity should be prepared by the company\u2019s auditor.<\/p>\n
So our big challenge for 2027 is going to be doubling down on the use of evidence, case law and whatever else it takes to make sure our reports are the most robust in the market; for our friends in the legal profession, the issues will be how to explain in articles and shareholder agreements what route should be taken to obtain a valuation if required by shareholders etc AND thinking ahead of clients about the defensibility of a valuation report not just due to its contents but also to its authorship.<\/p>\n","protected":false},"excerpt":{"rendered":"
The US valuations market leads the world so seeing new trends there means they will be over here soon.<\/p>\n","protected":false},"author":2,"featured_media":808,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-807","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/comments?post=807"}],"version-history":[{"count":1,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/807\/revisions"}],"predecessor-version":[{"id":809,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/807\/revisions\/809"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/media\/808"}],"wp:attachment":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/media?parent=807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/categories?post=807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/tags?post=807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}