Myrtle Beach, SC & Miami, FL (PRWEB) September 14, 2006
Highland Global, LLC principal Robert M. Clinger III is pleased to announce the release of its 2nd Quarter 2006 Update to its quarterly research on “Discount Statistics of Closed-End Funds.” Selecting an appropriate discount applicable to minority interests in family limited partnerships is a challenge for financial analysts and business appraisers. The assumptions that the analyst makes are particularly important and may come under intense scrutiny should the value conclusions be challenged by the IRS or the Tax Courts. Given that the selection of the appropriate discount is based on the reasoned, informed judgment of the analyst, supporting the discount with appropriate comparable data or empirical evidence is necessary to avoid potential confrontations with the IRS and adverse financial ramifications for the minority interest holders, heirs, etc. As a reference point for selecting the applicable discount for a minority interest in a family limited partnership, the analyst may consider discounts associated with shares in publicly traded closed-end funds as well as the relationship between the volatility of the fund (the fund’s beta), the focus/objective of the fund, and the characteristics of the interest being valued.
Each quarter, Barron’s Online (http://www.barrons.com) reports statistics on publicly traded closed-end funds. The statistics reported include the discount (or premium) of the market price from the fund’s net asset value (NAV), the 52-week average discount or premium, the fund’s objective, and various return measurements, etc. For the second quarter ending June 30, 2006, Barron’s reported that 490 closed-end funds traded at discounts to their NAV for the quarter. The average discount to NAV for the second quarter of 2006 was 8.3% with a median of 7.9% and a standard deviation of 4.4%. For the first quarter, the average discount to NAV was 7.4% with a median of 6.9% and a standard deviation of 4.6%.
Business appraisers, attorneys, professors, students, or accountants may find Highland Global’s research in this area useful in developing reference points for discounts applicable to minority interests in family limited partnerships or privately held entities that hold a diversified portfolio of financial assets analogous to closed-end funds. Highland Global co-founder and former candidate for the Horry County Council District #2 seat (South Carolina) Robert M. Clinger III stated the following upon release of the quarterly report:
Highland Global is pleased to release its most recent update to its proprietary research relating to discount statistics of closed-end funds. Not only do we use this research to support the valuation discounts associated with family limited partnerships in our own reports, we are finding that this research is becoming widely requested and downloaded from our site. We are confident that valuation practitioners and other professionals will once again find this value-added research and analysis insightful. As always, we are dedicated to furthering the valuation profession through continued excellence in research and contributions to the valuation body of knowledge.
About Highland Global—Highland Global, LLC is a leading strategic advisory and financial analysis firm for domestic and international privately-held and family-owned businesses. Some of Highland Global’s services include assisting clients with mergers and acquisitions, sales and divestitures, recapitalizations, management buyouts, and privatizations. Highland Global also provides a full range of valuation services including formal valuations, limited scope valuations, fairness opinions, and expert witness / consulting services. Highland Global performs independent business appraisals and valuations for a wide range of purposes including family limited partnerships, succession planning, gift taxes/planning, estates taxes/planning, mergers & acquisitions, employee stock ownership plans (ESOPs), financing/capital raising, divorce, shareholder issues, and litigation.
Highland Global principal Robert M. Clinger III is also the author of two books, The Seven Deadly Sins of Business Valuation and The Seven Deadly Sins of Business Valuation: Closely Held & Family Controlled Companies. Mr. Clinger has recently had his two part article, “Direct Market Data Method: Value Disparity Issues,” published in the National Association of Certified Valuation Analysts’ journal, The Value Examiner.
About Mr. Clinger—Robert M. Clinger III, co-founder of Highland Global, LLC, has strong experience in the fields of business valuation and financial analysis. Mr. Clinger has written numerous articles regarding economics, business valuation, and merger & acquisition issues. Mr. Clinger earned a Bachelor of Science degree in Business Administration/Finance, summa cum laude, from Coastal Carolina University and received the distinguished President’s award. Mr. Clinger has also earned the Accredited Valuation Analyst (AVA) designation from the National Association of Certified Valuation Analysts (NACVA) and is currently pursuing the Certified Business Appraiser (CBA) designation from the Institute of Business Appraisers.
Robert M. Clinger III, AVA, Managing Director
Highland Global, LLC
Additional contact Information:
Telephone: 305-347-5170 (Miami office)