Private Equity Experience
Private equity has become one of the most important forces in the middle market, and the demands on sponsors have grown with it. Limited partners, auditors, and regulators expect rigorous, independent fair-value marks; principals need defensible valuations of carried interest and management-company stakes; and a widening set of liquidity tools (dividend recapitalizations and continuation funds that now account for close to one in five sponsor-backed exits) has made independent transaction advice more important than ever. Since 1998, Applied Economics has delivered the valuation and investment banking services sponsors rely on at both the fund and the portfolio-company level, from acquisition through exit.
Why private equity sponsors need a specialized advisor
Sponsors operate at two levels at once, and the questions that drive value are different at each. At the fund level, value is reported to limited partners and tested by auditors every quarter. At the portfolio-company level, value is built, financed, and ultimately realized through transactions. An advisor who understands only one side rarely sees the whole picture.
The stakes around fair value have risen in particular. Most private equity holdings are Level 3 assets with no quoted market price, valued on inputs the sponsor itself develops — and the sponsor is responsible for both managing the portfolio and marking it. That dual role creates an inherent tension that limited partners, auditors, and the SEC scrutinize ever more closely.
At the same time, sponsors are using a broader toolkit to create and return liquidity: dividend recapitalizations, add-on roll-ups, and continuation funds — the last of which helped push the secondaries market to a record of roughly $226 billion in 2025. Each of these turns on a credible, independent view of value. That is the need Applied Economics is built to meet.
How we serve private equity sponsors
Sponsors turn to Applied Economics across the life of an investment — from diligence on a new platform, to annual fair-value marks and incentive-plan valuations, to the sale or recapitalization that returns capital. Our practice areas work together, so the same senior team that marks a portfolio company one quarter can carry that knowledge into its exit.
Valuation & Consulting. Independent, defensible valuation opinions for financial reporting, tax, and transaction purposes — documented to withstand review by auditors, the IRS, the SEC, and other regulatory bodies. For sponsors, that spans portfolio fair-value measurement, purchase price allocations and goodwill impairment, and the valuation of equity and complex securities.
Investment Banking. Sell-side and buy-side M&A advisory, recapitalizations, capital raising, and fairness and solvency opinions. We run competitive exit processes, help platforms pursue add-ons, and provide the independent opinions boards need to approve conflict-sensitive transactions.
ESOP Advisory. Feasibility analysis, transaction structuring, and annual valuations for employee stock ownership plans — a liquidity and exit alternative worth weighing for portfolio companies and independent sponsors alike.
The services we provide across the fund lifecycle
Private equity work calls for a mix of recurring compliance valuation and episodic transaction advice. The table below summarizes where we help, from the day a sponsor underwrites a deal to the day it exits.
| Service | What it is for, and when sponsors use it |
|---|---|
| Portfolio & fair-value measurement (ASC 820) | Fair value of portfolio holdings and complex securities for financial reporting, LP reporting, and audit support — the Level 3 marks that auditors and investors scrutinize most closely. |
| Purchase price allocation (ASC 805) | Allocation of purchase consideration to identifiable intangible assets after platform and add-on acquisitions, together with goodwill impairment testing. |
| Equity & incentive-compensation valuation (ASC 718) | Valuation of management incentive units, profits interests, options, and warrants used to attract and align portfolio-company leadership. |
| Fairness & solvency opinions | Independent opinions that help boards and sponsors approve dividend recapitalizations, affiliate and cross-fund transfers, and other conflict-sensitive transactions. |
| Sell-side M&A (exits) | Competitive sale processes that maximize exit value and minimize disruption when a sponsor is ready to realize an investment. |
| Buy-side M&A (add-ons) | Sourcing, valuing, and negotiating the add-on acquisitions that build out a platform. |
| Capital raising & dividend recapitalizations | Equity and debt capital to fund growth, or a recapitalization that returns capital to the fund without a full sale. |
| Carried interest & GP valuation | Valuation of carried interest, general-partner interests, and management-company stakes for the principals' gift, estate, and tax planning. |
| Strategic options assessment | Objective analysis of exit timing and alternatives — sale, recapitalization, continuation vehicle, or ESOP — before a sponsor commits. |
Why independence matters in private equity
Because a sponsor both manages and values its portfolio, better-looking marks make the next fund easier to raise — a conflict that limited partners and auditors are acutely aware of. ASC 820 does not require a third-party valuation, but an independent, well-documented opinion is the most direct way to give investors, auditors, and boards confidence that a mark reflects what an asset would actually fetch in the market.
- Credibility with LPs and auditors. An independent voice supports the fair-value marks that drive reported performance, from NAV to TVPI.
- Defensible under scrutiny. Opinions documented to withstand auditor review, board approval, and regulatory examination.
- Conflict-sensitive transactions. Fairness opinions for dividend recaps, continuation funds, and affiliate transfers — the situations where a sponsor effectively sits on both sides of the table.
Independence and defensibility are the foundation of our practice. They are the reason sponsors and their auditors rely on our opinions in the moments that matter most.
Why Applied Economics
- Valuation and investment banking under one roof. A sponsor gets consistent analysis from a single senior team, whether the need is a quarterly mark, a fairness opinion, or a full exit process.
- Senior-level attention. We take on a select number of engagements at a time, so experienced professionals — not junior staff — do the thinking on your matter. The judgment a Level 3 mark, a conflict-sensitive fairness opinion, or a competitive exit process calls for is counsel you would expect from a far larger bank, and you receive it at any engagement size.
- Credentialed professionals. Our team holds the designations this work demands — ASA, CPA/ABV/CFF, CVA, and CFA — the credentials an auditor, an LP, or a reviewing regulator looks for when a mark or an opinion has to hold up.
- A track record since 1998. Across roughly 2,000 engagements for clients local, national, and worldwide, we have built a depth of judgment we bring to every private equity mark, opinion, and transaction we take on.
How we can help
We support private equity sponsors, their portfolio companies, and their advisors across every engagement described above.
Whether you are underwriting a new platform, preparing year-end marks for your LPs, approving a recapitalization, or planning an exit, we would welcome the conversation.