Alternative Investment

Valuation association: not just for quantitative geeks

The idea of an association for valuation professionals came about in February 2020, began Rafaël Le Saux, LVPA board vice president, but was put on the back burner due to covid. The process was reinvigorated in November of last year, bringing together a variety of sectors: people performing valuation for other parties, but also people from the fund industry, alternative investment funds or from fintech. It was key to be “able to represent all the different interests in this association,” said Le Saux, who is also the corporate finance director and valuation and modelling lead at PwC Luxembourg.

All the stakeholders that rely on valuations–investors, fund managers and others–need to base their investment decisions on sound valuations, added Christophe VandendorpeChristophe Vandendorpe, board president and strategy & transactions leader at EY Luxembourg. It’s crucial to have professionals that are capable of producing such valuations.

It’s important for a place like Luxembourg to have its own valuation profession in general

Christophe Vandendorpe

Christophe Vandendorpepresident of the boardLVPA

“What we sometimes see is that because it’s an emerging profession here in Luxembourg, we often rely on what is produced elsewhere in terms of valuation,” Vandendorpe said. “And I think it’s important for a place like Luxembourg to have its own valuation profession in general.”

The role of the association

But there are already companies that provide valuation services in Luxembourg. Why would valuation professionals in Luxembourg need their own association?

While it is true that many companies do provide valuations, said Hind El Gaidi, board vice president and head of valuation, financial information and marketing at Astorg, this remains a position that is taken by a particular company. It is not representative of valuation professionals. Most valuators in Luxembourg are, in fact, already part of international associations. “But it remains extremely important that we also take a position,” she insisted, offering the case of covid as an example. Associations in different countries, like France Invest, issued guidance on how they would expect valuations to be done under the circumstances.

It’s important to make sure that this association is a cross-sectoral association

Antoine Boggini

Antoine Bogginivice president of the boardLVPA

The association would take on this role, said El Gaidi, as well as provide education. It becomes a way to merge discussions and questions from different companies, associations or the regulator, and to promote interactions and exchanges.

Key to involve many different sectors

Vandendorpe emphasises the importance of speaking with peers and exchanges on topics across all sectors, and not just focusing on one specific sector. “It’s important to make sure that this association is a cross-sectoral association,” added Antoine Boggini, board vice president and managing partner at BHB & Partners. “We are not just focusing on the alternative investment [industry] or even on the investment industry.” Exchanges and discussions among diverse participants are therefore a key part of the LVPA.

From an external perspective, valuation professionals can be perceived as quantitative geeks, just working in spreadsheets

Antoine Boggini

Antoine Bogginivice president of the boardLVPA

The association also wants to help increase valuation competencies, not just in the financial sector, but outside the financial sector. “One of the main objectives of the association is to create formal or informal platforms to discuss about these topics,” Boggini said. “[The topics] could really be theoretical, but can also be based on, let’s say, hot topics–covid, inflation, increases in interest rates–and their impact on valuation. So it could be really concrete.”

“From an external perspective, valuation professionals can be perceived as quantitative geeks, just working in spreadsheets,” said Boggini. “But I think it’s important to understand that we’re talking about literal, tangible, practical things that we can see in the current environment.”

How does the association work?

“There are different categories of members that we will accept,” explained Vandendorpe. “We want to invite as many people as possible to join our association, but we also want to make sure that we keep the requested level of quality, based on our initial discussions with the regulators.” It’s an expectation not only from the regulators, but also from the markets, he added. The LVPA also wants to make sure they are helping to raise the bar in terms of skill sets present on the market.

It’s an ideal moment to acquire valuation skills and to join the profession, which in our view, is very promising in terms of development, going forward

Christophe Vandendorpe

Christophe Vandendorpepresident of the boardLVPA

There will be two main categories: active members and associate members. There will also be a specific sub-category for students, which is very important. “There’s a growing need for valuation professionals,” continued Vandendorpe. It is not just for young professionals, but also for seasoned professionals who wish to reorient their career. “It’s an ideal moment to acquire valuation skills and to join the profession, which in our view, is very promising in terms of development, going forward.”

In fact, the LVPA is planning to organise training courses in the coming year, ensuring that people have the chance to become a trained valuation professional, should they wish to do so.

“There is a will to have more front office positions in Luxembourg,” Le Saux added. Key technical skills are the ability to perform valuation, financial modelling and investment analysis, for example. “By improving the quality of the profession locally, we’re also enabling these positions to be created in the future.” This, in turn, makes Luxembourg more attractive as a location.

Upcoming events

The LVPA’s launch event on 15 November is already nearly full, said El Gaidi, illustrating the appetite for the association. Half will focus on content, featuring keynote speeches from Nick Talbot of the International Valuation Standards Council and Claude Wampach of the regulatory agency CSSF, as well as a panel of experts. The panellists–Talbot, Solenne NiedercornSolenne Niedercorn, a non-executive fintech director, and Yann Magnan of 73 Strings–will offer a range of different perspectives related to valuation, while the cocktail during the second half will allow people to network and exchange ideas.

Future events include quarterly events, such as panels or webinars, and one yearly flagship event. For more information, check out their website: Luxembourg Valuation Professionals Association.

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