Dividend Recaps: The Critical Role of Solvency Opinions
Since March 2022, when the Federal Reserve initiated rate hikes in response to inflation, borrowing costs have generally increased. However, interest rates have begun receding in recent months fueling a wave of refinancing and repricing activities, including dividend recapitalizations (“Dividend Recaps”), a transaction wherein a company borrows money to pay a special dividend to shareholders.(1) […]
The Rise of Continuation Funds – Navigating New Liquidity Solutions in Private Equity
In the dynamic world of private equity, continuation funds have become a crucial tool for tackling liquidity issues and enhancing value creation. With traditional exit strategies like IPOs and M&A transactions encountering more hurdles, private equity firms are increasingly relying on continuation funds to prolong the lifespan of their investments, offer liquidity to limited partners […]
SEC Discusses Valuation Focus in 2024 Exam Priorities
The SEC discusses valuation in the Division of Examinations’ 2024 Exam Priorities. The SEC’s Division of Examinations (the “DOE”) has announced its 2024 examination priorities. The annual report provides insights into the Division’s risk-based approach, including the areas it believes present potential risks to investors and the integrity of U.S. capital markets(1). Valuation was discussed […]
SEC’s New Rules for Private Fund Advisers
UPDATE: On June 5, 2024, the 5th U.S. Circuit Court of Appeals in New Orleans issued a unanimous ruling overturning the SEC’s Private Fund Rules. In this whitepaper, Houlihan Capital discusses the SEC’s new rules for private fund advisers under the Investment Advisers Act of 1940 and changes that create major compliance obligations involving the […]
Venture Capital: Valuing Early-Stage Portfolio Companies in a Slowing Deal Environment
The first half of 2023 shows a continuing shift in the landscape of early-stage venture capital (VC) deals. Amidst an environment of high interest rates and increased portfolio company cash burn, VC funds are deploying capital more carefully. This has had a noticeable impact on angel and seed-stage deals. According to Pitchbook’s Q2 2023 US […]