Most of the assets we value lack liquidity. Because they are illiquid, such assets typically sell at a discount from their market price.
But how much of a discount is appropriate? How does one determine the value of illiquid assets where no public market readily exists?
While many factors should be considered in a valuation, recent sales of similar assets are especially important. Just as real estate agents use the selling price of other homes in a neighborhood to help determine the asking price of a home that is just going on the market, we use sales of similar securities as a benchmark.
LiquiStat provides Pluris with comprehensive data from comparative real-world transactions in illiquid securities that can be used to generate, document and support an opinion of an illiquid asset's value. The database is a powerful analysis tool that plays an important role in the valuation process and provides us with a resource that's not available to other valuation firms.
The LiquiStat database includes thousands of recent transactions. With hundreds being added each month, the database is growing rapidly. The following is just a partial list of the types of securities transacted in the secondary markets, where we have data available in LiquiStat:
- Restricted stock
- Warrants and stock options
- Convertible debentures and preferred stock
- Auction rate securities (SLARS, MARS, ARPS, "Toxics")
- Asset/Mortgage-backed securities
- Whole loans and portfolios
- Limited partner interests in hedge funds and private equity funds
- Private company stock
- Bankruptcy claims
For more information on how the LiquiStat database can help you and your clients, please e-mail us.