11 Aug 2022
Market Metrics: Private Company Valuations
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
We have seen many financial market crashes first hand during the past three decades with the three biggest being the 2000 Tech Wreck (Dot-com Bubble), the 2008 Global Financial Crisis (GFC) and the 2020 Coronavirus Crash.
The period from December 2021 to June 2022 has not been a financial market crash for listed companies in Australian or listed companies globally but the same cannot be said for private companies where Enterprise Valuations have dropped an average of 60%.
That figure is uncomfortabley large.
Click for chart.
The bigger issue however is the lack of liquidity available to investors because there is no public market to buy or sell holdings.
This is our number one concern with unlisted assets because in a crisis you want the flexibility to be able to action changes.
On a more positive note, financial asset prices have increased over the past month because the Mr Market is expecting inflation to slow.
If you have family, friends or colleagues that want financial advice please ask them to contact us and we will work out how best to help.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.