What distinguishes Pluris from other valuation firms?
Pluris specializes in determining the fair value, or fair market value, of restricted securities. Our unique focus and specialization, capital markets expertise, proprietary research and empirical data, and in-depth knowledge of relevant securities laws and regulations, set us apart from most other valuation firms. Our LiquiStat database of restricted stock and warrant transactions is the best example of our proprietary research. LiquiStat provides unique and unrivaled empirical support for our valuation work. Such data is particularly important for determining illiquidity discounts.
Is Pluris really the only valuation firm nationwide that specializes in valuing restricted securities?
To the best of our knowledge it is. Many other valuation firms can value restricted stock and warrants, and do so occasionally. We do not know of any other valuation firm anywhere that specializes in valuing restricted securities or that values restricted securities on a daily basis.
Why hire the specialists? Do the benefits really outweigh the added cost?
There may not be any added cost to hiring the specialists at Pluris — and it may even cost less than going to another valuation firm. While Pluris’ proprietary research and empirical support for our valuations make our valuation reports more “auditable” and better able to withstand scrutiny from investors, auditors and regulatory agencies, our focus on this particular class of securities enables us to also keep costs down. As a result, Pluris valuation reports may, for most clients, offer better support at lower cost.
Are there studies or databases similar to the LiquiStat database that I should look at?
The LiquiStat database is used for determining illiquidity (or lack of marketability) discounts. There are numerous studies of illiquidity discounts available in the financial and valuation literature, but they differ from the LiquiStat study. Such studies are typically classified as either pre-IPO studies or restricted stock (private placement) studies. For a discussion of the factors that make LiquiStat unique, and uniquely suited for determining illiquidity discounts, please refer to our LiquiStat page.
What are discounts for lack of marketability and how are they determined?
Assets that lack marketability, or have limited marketability, are always valued at a discount from their marketable minority basis values. For a company that is publicly traded, determining the marketable minority value of its stock is a simple process of looking up its trading price on the valuation date. Most analysts determine the discount from this market “reference price” by analyzing data on restricted stock transactions.
What other securities or assets does Pluris value?
Pluris values all other assets or securities where the proper discount for illiquidity is a major valuation issue, e.g., securities of privately held companies, or fractional interests in family holding companies.
Why does Pluris focus on hedge funds?
We have found that hedge funds vary significantly in how they mark the restricted securities in their portfolios to market. Some funds also change valuation methods over time. Whenever NAV calculations become opaque and inconsistent from fund to fund, investors face severe difficulties in determining the true value of their holdings. It can be difficult to compare the investment earnings and volatility of earnings of different funds. Regulatory agencies and auditors are becoming more vigilant in overseeing the operations of individual funds. A new financial accounting standard on “fair value” determinations, FAS 157, will also change how securities are valued. Investors, particularly those investing in funds-of-funds, are more and more concerned about getting proper NAVs. In short, there is a very significant unmet need among hedge funds for proper valuations of their most illiquid and hard-to-value securities.
Has your research been published?
Our research, including our LiquiStat database of restricted stock, warrant, and other restricted securities trades, is proprietary. However, our analysis of data from the research was published as the cover story in Valuation Strategies (January 2007), and has been cited in other financial, tax, accounting and investment journals.
What if your valuations are challenged after the fact?
If our determination of fair value (or fair-market value) is challenged by your auditors, the IRS or any other outside entity, we will assist you in resolving any conflicts. Sometimes, bringing more research and data to the table will help different parties come to an agreement on what the fair value is. Should conflicts become irreconcilable, our professionals are experienced with audits, litigation support and expert testimony.
Are there geographic limits to where Pluris accepts work?
There are no geographic limits to our work. Since most of our assignments require determining marketability discounts for securities of public companies, there is no need to visit the company’s operations. Consequently, the companies whose securities we value, and our clients, are normally not located near our headquarters.
Where are you located?
Pluris is located in New York City. See our Contact page for full contact information.
How can I apply to work in your organization?
Pluris is a fast-growing, entrepreneurial company and is constantly looking for highly-qualified professionals. In particular, anyone familiar with derivatives pricing models or hedge fund accounting is encouraged to submit a resume for consideration. For instruction on how to submit your resume, please go to our Careers page.