Evaluation of Management Packages / Carried Interest
AURYS Evaluation meets the specific needs of its clients in terms of the valuation of financial instruments, in particular in the context of operations such as LBOs or fund raising (Series A, B, etc.) for managers, legal advisors and investment funds. Our firm has the capacity to value all types of instruments, from the simple product to the most sophisticated integrating TRI and/or multiple conditions (BSA, ADP and AGADP, OC, AGA, etc.).
Our firm also assists management companies in the independent valuation of their shares in the funds, as well as in the valuation of Carried Interest’s shares a crucial aspect in the field of investment funds.
Our advisors:
The Carried Interest represents the share of profits allocated to fund managers as a reward for their performance in managing investments.
We use a multi criteria approach, including models such as ( Black & Scholes , Trinomial Tree and Monte Carlo simulations) to perform our evaluations rigorously and accurately.
In addition, we intervene in disputes with the various administrations and supervisory bodies, such as the (DVNI, Dircofi, AMF, etc.) to defend the interests of our clients and to substantiate the conclusions of our reports with solid arguments.
Defining Management Packages
The Management Package (or “ManPack”) is a vehicle used to motivate while promoting the sharing of value creation. In addition, it is used to retain the managers of SMEs.
In other words, the Management Package is a vehicle for motivating a company’s Key Men and a governance instrument that is supposed to align the interests of key shareholders and employees.
This practice is favoured by investment funds in order to relend part of the future capital gain. The Management Package allows managers to be more involved in the growth of the company and gives its beneficiaries access to capital.
To achieve these objectives, companies have a range of instruments at their disposal, such as:
- Common shares or preference shares
- The options
- Promises
- Stock warrants (BSA)
The challenges of Management Packages
- The Transactional Challenges
It is a question of ensuring fairness between management and financial shareholders. - The stakes for the leader
It’s about being able to measure the value of the assets that are being offered to them as a compensation tool. - Issues for the issuer
This involves measuring the cost of compensation tools and making trade-offs.