IPEV Valuation Guidelines
What IPEV Is
The International Private Equity and Venture Capital Valuation (IPEV) Board is an international body that develops and maintains valuation guidelines for private capital. Its membership and endorsers include major industry associations including Invest Europe, BVCA, and others.
The IPEV Guidelines are the principal industry reference for how private capital fund managers should measure and report the fair value of investments. They do not have the force of accounting standards, but they are widely adopted by GPs and recognised by auditors and LPs as the standard framework for private markets valuation.
What the Guidelines Cover
At a high level, the IPEV Guidelines address:
Fair value as the measurement basis — The guidelines adopt fair value as the appropriate measure for private capital investments: the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. This is consistent with IFRS 13 and ASC 820 (the accounting standards that govern fair value measurement in financial reporting).
Calibration — The guidelines explain how initial transaction price provides a starting point for fair value, and how subsequent valuations should be calibrated against observable market data where possible.
Valuation methodologies — The guidelines describe approaches including earnings multiples (EV/EBITDA), discounted cash flows, net assets, and market-based approaches, with guidance on when each is appropriate.
Valuation uncertainty — The guidelines acknowledge that fair value of private assets involves judgement, particularly for early-stage, distressed, or complex instruments. Ranges of reasonable estimates are recognised.
Note: This source note is based on publicly available descriptions of the IPEV Guidelines. The full guidelines document should be consulted at the source URL above for specific methodology details, calibration procedures, and example applications. The guidelines are periodically updated; the current version should be verified.
Why It Matters for This Bundle
NAV and fund accounting: The IPEV fair value framework underpins how private fund investments are measured in NAV production and reported in NAV. A fund’s reported NAV is only as reliable as the valuations it aggregates.
Valuation risk: The guidelines acknowledge the subjectivity in private markets valuation — the same principles discussed in Valuation Risk. The Level 2 and Level 3 fair value concept discussed there is consistent with IPEV’s graduated approach to observable vs unobservable inputs.
Performance metrics: Because TVPI and RVPI depend on unrealised portfolio valuations, the quality and consistency of valuation methodology directly affects these metrics. IPEV-aligned valuations provide a more defensible basis for comparing multiples across managers.
Private equity and private credit: Both private equity and private credit portfolios are subject to valuation judgement at each reporting date. The IPEV Guidelines provide the framework within which that judgement should be exercised.
Investor reporting: LPs increasingly expect GP valuation policies to be consistent with or explicitly reference IPEV Guidelines. This is relevant to the audit process discussed in investor reporting.
Relevant Local Files
Source Verification Note
This source note is based on publicly available summary descriptions of IPEV Guidelines. The full guidelines document is available on the IPEV website and should be consulted for specific methodology, calibration, and disclosure requirements. This file does not reproduce guideline text or claim to summarise specific sections accurately without verification.