Corporate Valuation, Investment Management

January 3, 2017

RIA Valuation Insights: Best of 2016

Happy New Year 2017! Here are this past year’s 5 most popular posts from the RIA Valuation Insights Blog.

1. The Valuation of Asset Management Firms

This posts introduced a whitepaper summarizing thoughts on the valuation of RIAs. Understanding the value of an asset management business requires some appreciation for what is simple and what is complex. On one level, a business with almost no balance sheet, a recurring revenue stream, and an expense base that mainly consists of personnel costs could not be more straightforward. At the same time, asset management firms exist in a narrow space between client allocations and the capital markets, and depend on revenue streams that rarely carry contractual obligations and valuable staff members who often are not subject to employment agreements. In essence, RIAs may be both highly profitable and prospectively ephemeral. Balancing the particular risks and opportunities of a given asset management firm is fundamental to developing a valuation.

2. What Does the Market Think About RIA Aggregators? Focus Financial is About to Find Out.

Focus Financial Partners started preparing documents to file an initial public offering. While it may seem like a good idea on paper, we have many questions about the Focus IPO including: why now, how much, and how is this not a roll-up?

3. Portfolio Valuation: How to Value Venture Capital Portfolio Investments

In this guest post from Mercer Capital’s Financial Reporting Blog, our process when providing periodic fair value marks for venture capital fund investments in pre-public companies is described. This process includes examining the most recent financing round economics, adjusting valuation inputs the measurement date, measuring fair value, and reconciling and testing for reasonableness.

4. What is Normal Compensation at an Asset Management Firm?

Investment management is a talent business, and that talent commands a substantial portion of firm revenue which often exceeds the allocation to equity holders. While there is no perfect answer as to what an individual or group of individuals should be compensated in an RIA, we can look to market data and compensation analysis, measured against the particular characteristics of a given investment management firm’s business model, to make reasonable assumptions about what compensation is appropriate and, by extension, what level of profitability can be expected.

5. Updated: Valuation Best Practices for Venture Capital and Private Equity Funds

The International Private Equity and Venture Capital Valuation (IPEV) Guidelines were developed in 2005 to set out recommendations on best practices in the valuation of private equity investments. The IPEV Board is made up of leading industry associations from around the world, including the National Venture Capital Association (NVCA) and the Private Equity Growth Capital Council (PEGCC) in the United States. In October 2015, the IPEV Board published draft amendments to the existing guidelines that, if approved, will go into effect at the beginning of 2016.

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RIA Market Update: Q3 2026
RIA Market Update: Q3 2026
Publicly traded investment management firms advanced in Q3 2026, with both large and small traditional managers outperforming the broader market while alternative asset managers continued to lag.
RIA Valuation Insights Blog Investment Management
Read Now about RIA Market Update: Q3 2026
When RIA Owners Disagree on Value
When RIA Owners Disagree on Value

Choosing the Appraiser, the Process, and the Rules of Engagement

Valuation disputes among RIA owners require more than a defensible appraisal—they also require a clear process for selecting a qualified, independent appraiser and establishing fair rules of engagement. Thoughtful dispute-resolution provisions can help parties reach a credible conclusion even when perspectives on value differ.
RIA Valuation Insights Blog Investment Management
Read Now about When RIA Owners Disagree on Value
Mercer Capital to Sponsor the Association of Trust Organizations 2026 Annual Meeting
Mercer Capital to Sponsor the Association of Trust Organizations 2026 Annual Meeting
Mercer Capital is pleased to sponsor the Association of Trust Organizations’ 2026 Annual Meeting, taking place September 21-23, 2026, at the Grand Hyatt Deer Valley in Park City, Utah. Matt Crow, Brooks Hamner, and Zach Milam will attend on behalf of the firm.The 2026 Annual Meeting is a 1.5-day conference designed exclusively for the trust industry and will feature more than 13 hours of roundtables, panels, and networking. One of the featured sessions is Tuesday afternoon’s Session VI, “What Makes a Trust Company Worth More? Building Value Before the Deal,” which will be moderated by Matt Crow. The panel will explore the factors that drive valuation, how buyers and sellers evaluate opportunities, and what firms can do today to maximize enterprise value.Matt Crow, CFA, ASA, is the CEO of Mercer Capital and leads the firm’s Investment Management Industry team. He works with RIAs, independent trust companies, broker-dealers, and investment consulting firms on valuation matters related to corporate planning and reorganization, transactions, employee stock ownership plans, tax issues, and intangible asset valuations. Matt is also a frequent contributor to Mercer Capital’s RIA Valuation Insights blog.Brooks Hamner, CFA, ASA, is a Senior Vice President and a senior member of Mercer Capital’s Investment Management Industry team. He provides valuation services to RIAs, independent trust companies, asset managers, wealth management firms, broker-dealers, and investment consultants, and he also advises clients buying or selling their business.Zach Milam, CFA, is a Vice President and a senior member of Mercer Capital’s Investment Management Industry team. He has experience in corporate planning and reorganizations, financial reporting, fairness opinions, litigation support, employee stock ownership plans, and estate and gift tax planning and compliance matters.Mercer Capital regularly works with RIAs, independent trust companies, broker-dealers, and other investment management clients on valuation and advisory matters, and the firm looks forward to connecting with attendees in Park City. Visit the conference website to learn more about this year’s Annual Meeting: https://trustorgs.com/annual-meeting/.

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