The value of any proposed investments will be determined according to the following valuation methodology:
- The value of any cash on hand or on deposit, money market instruments, bills, demand notes, accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received is deemed to be the full amount thereof, unless in any case the same is unlikely to be paid or received in full, in which case the value thereof is arrived at after making such discount as may be considered appropriate in such case to reflect the true value thereof.
Unlisted securities: Any securities (equity, debt and structured financial instruments) which are not listed on a stock exchange nor dealt on a regulated market are determined at the fair value based on the reasonably foreseeable sales price determined prudently and in good faith by the AIFM who may use Private Equity valuation guidelines such as but not limited to:
- International Private Equity and Venture Capital Valuation Guidelines (IPEVCVG) published by the European Private Equity and Venture Capital Association (EVCA);
- the British Venture Capital Association (BVCA);
- the Luxembourg Private Equity (LPEA);
- the Emerging Markets Private Equity Association (EMPEA).
These evaluation methodologies have been adopted by many venture capital and private equity associations as well as by the International Limited Partners Association;
- Listed securities (equity, debt and structured financial instruments) which are listed or dealt in on a stock exchange or dealt in on a regulated market are based on the last available price on the stock exchange or the regulated market, which is normally the principal market for such securities;
- Liquid assets and money market instruments may be valued at nominal value plus any accrued interest or using an amortised cost method. This amortised cost method may result in periods during which the value deviates from the price The Equity Power Fund would receive if it sold the investment. The AIFM may, from time to time, assess this method of valuation and recommend changes, where necessary, to ensure that such assets will be valued at their fair value as determined in good faith pursuant to procedures established by the AIFM. If the AIFM believes that a deviation from the amortised cost method may result in material dilution or other unfair results to Shareholders, the AIFM shall take such corrective action, if any, as it deems appropriate, to eliminate or reduce, to the extent reasonably practicable, the dilution or unfair results. All other securities and other assets will be valued at fair market value as determined in good faith pursuant to the procedures established by the AIFM. The value of all assets and liabilities not expressed in the Reference Currency will be converted into the Reference Currency of The Equity Power Fund at rates last quoted by any major bank. If such quotations are not available, the rate of exchange will be determined in good faith by or under procedures established by the AIFM.
The AIFM, in its discretion and in respect of the industry guidelines, may permit some other method of valuation to be used if it considers that such valuation better reflects the fair value of any asset of the Equity Power Fund.