Law firm Walkers recently teamed up with valuations experts from professional services firm, Duff & Phelps to run seminars for financial services professionals in Jersey and Guernsey under the title: “Putting a Price On It – The Law and Practice of Asset and Company Valuations”.
The events were attended by over 250 individuals across the islands. The panels were chaired by Jersey-based Walkers partner, Nigel Sanders, and comprised of Alison Ozanne – Walkers partner from Guernsey, Mike Weaver – head of the Duff & Phelps EMEA valuation advisory practice and Sharon Davies – a managing director in the London office. Ed Shorrock, a director in Duff & Phelps’ Channel Islands office, also joined the panel for the Guernsey seminar.
They were steered through a scenario involving an overlying discretionary trust invested in a variety of assets including an interest in a fund, a minority stake in a trading company, wholly owned stakes in an operating company and an early stage high growth company.
Underpinning the scenario was the ever-increasing desire of second and third generation beneficiaries to secure their own, separate allocation of family assets as they seek a more independent life outside of traditional family trust structures. The Walkers team addressed the legal challenges inherent in resolving such problems while the Duff & Phelps team focused on the complexities of the valuation process.
Focusing on valuation concepts such as market value, Sharon explained the principles behind sales comparison and income-based valuation techniques and when they would be most appropriate to engage. The difficulties of valuing early stage growth companies (often referred to as ‘unicorns’) were also explored together with techniques to address these through the use of appropriate discount rates and challenging assumptions made among others. Problematic areas such as the valuation of distressed businesses, factors to consider in valuing minority shareholding in businesses and conflicts of interest in transferring fund interests when the same fund manager was involved were also dealt with, accompanied by some insightful and thought- provoking questions from delegates.
Nigel Sanders said: “The issue of valuation is a central one in so many situations facing our clients, be it in the context of companies, trusts or funds. That was demonstrated by the high numbers of local practitioners from a broad range of service providers attending the seminars. That level of interest and the technical questions that were raised during the Q&A sessions and also after the seminars shows that this is an area of significant relevance to the financial service industry.”
