No corner of the economy has remained unaffected by the coronavirus pandemic, but the effect has not been the same for every industry. Some have shown remarkable resilience, while others face a long and difficult path to their pre-pandemic status. Those disparate trajectories will likely come into sharper focus as fund managers prepare their valuations as of the end of the second calendar quarter (Q2), which necessitates careful navigation of the unique traits and issues associated with each class when determining the fair value of assets. To guide the industry in preparing accurate valuations as of June 30, 2020, particularly in light of struggles with valuations from March 31, 2020, Duff & Phelps hosted a webinar featuring, among others, managing directors David Larsen (alternative asset advisory); David Scott (alternative asset advisory); Ross Prindle (real estate advisory); and Jennifer Press (financial instruments and technology). This second article in a two-part series summarizes some of the Q2 valuation issues for real estate, energy and other asset classes, while also providing an overview of how they were affected by the pandemic. The first article
examined the social and economic fallout from the coronavirus pandemic during Q2; unique developments in the private funds industry; and valuation guidance for equity and debt positions. See “Evolving PE Fund Management Techniques and Considerations During a Financial Crisis (Part One of Two)
” (May 19, 2020); and “Key Considerations for Private Fund Investors Navigating the Coronavirus Crisis
” (May 12, 2020).