IPEV 2025: method questions

Not in the sense of a certification: the Guidelines do not accredit a tool or a fund, and the Valuer remains fully accountable for their conclusions, including when relying on automated or AI tools. What a tool can make verifiable is the application of the valuation policy: the method adopted for each investment, dated assumptions, justified deviations, approval before close. That is Jolv's scope — valuation campaigns, equity bridge, audit trail, Freeze & Lock — and nothing beyond it.

The IPEV framework treats the entry price, where it is deemed to be fair value (an orderly transaction), as the calibration point (§2.6): the implied multiple and its gap to comparables serve as the reference, without being carried forward automatically, and that gap is reassessed at each measurement date; a more recent orderly transaction becomes the more relevant reference. The difficulty is rarely the initial calculation; it is the silent drift from one quarter to the next, when a peer panel is modified or a method replaced without the deviation being documented. Jolv carries methods and peer panels forward from one campaign to the next, locked and traced, so that a change of method is a visible choice.

The IPEV 2025 Guidelines rule out a discount for marketability, defined as the time needed to complete a transaction (§1), but require a lack of liquidity to be considered when adjusting multiples (§3.4); calibration to the entry price is the tool they propose to assess it. Where the discount is applied and at what rate are matters of the Valuer's judgement, framed by the valuation policy, and must be documented. Jolv adopts one convention: by default on the multiple, with an option to apply it to the fair value of the holding at the end of the equity bridge, never to net debt or to 100% equity before the fund's share. At the same rate, the two placements do not produce the same value: applied to the multiple, the discount bears on enterprise value and flows through to equity with the effect of leverage.

The Guidelines address fair value, not performance metrics, which are governed by market conventions (GIPS, ILPA, Invest Europe) and by the fund's policy. Jolv uses MoIC = (NAV + realised distributions) / invested cost and presents NAV / cost as RVPI. Two Jolv conventions are added: escrow or an earn-out enters the numerator only once collected, a more conservative approach than Invest Europe's, which includes its estimated fair value; a fully written-down investment carries no NAV: its MoIC reduces to distributions already received, i.e. 0.00× if there were none. At fund level, TVPI, DPI and RVPI are measured against called capital; reconciling an investment-level MoIC with a fund TVPI requires a bridge covering denominators, fees and carried interest.

Jolv convention: a repayment is cash received and leaves historical cost unchanged; capitalised PIK interest increases cost — the actual exposure — and records no IRR cash flow until something is collected. Treating PIK as an interim cash flow builds unrealised performance into IRR. The 2025 ILPA definitions also treat PIK as non-cash and add it to the cost basis, but exclude it from invested capital, the denominator of gross MOIC: the two conventions produce different multiples, comparable only with the convention stated. For fair value, the IPEV Guidelines look to the present value of the amount expected on redemption, not the accrued face value (§5.7).

For fair value, what matters is the plan's overall dilutive effect at the measurement date, reflected in the equity bridge. It depends on the nature of the rights: those subject to a service condition are included once outstanding, those subject to a performance condition only if vested, and any acceleration expected on a sale is reflected (§2.4). Jolv takes this overall effect as an input; administration of the plan (beneficiaries, tranches, tracking of the vesting schedule) remains outside its scope.

The value and, above all, the path that led to it: the financial metrics used and their source, the peer panel and exclusions, discounts and where they were applied, the equity bridge, the author and date of each change, and the frozen state presented to the committee. A valuation that is in line with the market but cannot be reconstructed remains hard to defend in audit review. It is also what backtesting requires (§2.7): comparing an exit price with the latest fair values means knowing what was known or knowable at each measurement date. In Jolv, every change is versioned, timestamped and attributed, and Freeze & Lock locks the approved campaign.

No. The policy belongs to the GP and is discussed with the auditors; the Guidelines recommend a written policy that incorporates them (“Application of the Guidelines”). Jolv provides the tooling to apply it: it configures the methods and conventions adopted, applies them in each campaign and keeps a record of deviations.