Key updates to the IPEV Guidelines: What fund managers need to know for 2026

The new IPEV Guidelines have been published, taking effect for periods starting on or after 1 April 2026.

The latest guidelines are published within the broader context of continued global interest in private capital, and the transparency (or opacity) of investment valuations. In 2025, the Financial Conduct Authority (FCA) published its (generally positive) review of Private Market Valuations and is now following up with a review of conflicts of interest. The Bank of England has recently launched a system-wide exploratory scenario exercise focused on private markets, which will gauge risks and risk controls amongst lenders to private capital.

Having led the BVCA Working Group which responded to the IPEV Board’s consultation, I'm pleased to see that many of the points of feedback provided by the working group have been adopted, which hopefully brings additional clarity to those fund managers, valuers and auditors who raised questions during the consultation process.

There were no changes to the guidelines themselves, only to the explanatory notes. In most cases, changes were made to improve clarity of the guidance, something that the working group was also focused on. Hopefully, the improvements to clarity should support continued adoption within the industry.

In this article, I have highlighted some of the key areas where changes were made, focusing on the broader themes, with page references for specific changes. In the coming months, I will be sharing further thoughts and participating in events to discuss some of these changes in more detail.

Complex capital structures

Financial instruments and, by extension, company capital structures are becoming increasingly complex, leading to increased focus within the IPEV Guidelines on how to ensure such instruments are appropriately valued.

Complex capital structures, which sit within section 3.10 Calibrating to the Price of a Recent Investment (p.40 to 42) has been expanded to address this topic and has also changed significantly from the draft version, so it's worth a fresh read.

• Complex Capital Structures (p40 to p42): Expanded to cover the context (rights and preferences) and valuation methods which may be relevant when dealing with such structures.
• Liquidation preferences (p42): Further clarification of the importance of considering the valuation of such preferences.
• Valuing seed, start-up and early-stage (pre-revenue/pre-earnings) Investments (p43-44): Valuation methodologies have now been moved out of this section and into the previous section to avoid duplication.
• Determining the value of debt to be deducted (p15): This section covering deduction of debt from enterprise value has been updated. Although it's not linked directly, it is worth keeping in mind.

One question I was asked by a fund manager was how this section on complex capital structures links with 2.4 Allocating Enterprise Value. It is helpful to factor in the Unit of Account and consider:

How would a market participant buyer/seller consider the business valuation and capital structure in the event of a transaction?

Traditional PE investors with majority control, or in a close partnership with a co-investor, would tend to look at a simpler allocation exercise, assuming a sale of the whole business, while businesses with many investors in differing levels within the capital structure (such as VC and growth-stage) may need to more carefully consider the relative rights and preferences of the classes of instruments they hold, relative to other earlier or later stage investors.

Debt and convertible instruments

Staying on the topic of complexity, further context has been added to the sections on valuation of debt and convertibles, with changes including:

• 3.8 Discounted Cash Flows - Valuing Debt Investments (p36-37): Clarification on the methodologies for fair valuing debt and convertible debt instruments
• 5.20 Venture Debt and Convertible Loan Notes (p67): A new detailed section on these securities

I provided substantive feedback on section 5.20 Venture Debt and Convertible Loan Notes, having come across a lot of these securities in recent years and often seeing either too little focus (held at cost) or overengineering (complex Monte Carlo simulations of all possible scenarios, disconnected from actual investor expectations). In my mind, a valuer should focus on the following:

In assessing the Fair Value of such instruments the Valuer should understand the investors’ expectations and only consider those options which would be taken into account by a Market Participant at the Valuation Date. [IPEV, p.68]

This links back to the principle of fair value and establishing a valuation which is aligned to the way that a market participant buyer/seller would look at the investment, i.e. grounded in commercial reality.

Known and knowable, and limited information

There have been further clarifications on which information should be accounted for or not, and how to factor cases of limited information into the valuation.

While many valuers are comfortable with the requirements, this was a particular area of discussion in the working group as it can still raise questions when events occur after the valuation date, but before NAV is reported, which may call the valuation into question (for example, a transaction a short period after the valuation date). It was interesting to hear from LPs, who are sometimes exposed to managers with different valuation and audit processes, which can lead to differences in valuation depending on what has and has not been included in the NAV.

Other changes

Several other changes have been made throughout the guidelines, which cover the use of technology in valuations, clarification on sustainability factors (changed from ESG), and other specific technical areas where questions were raised. While it is not my intention to cover them all in this article, I look forward to discussing these at events and with clients in the coming months. 

If you have any questions on the changes to the IPEV Guidelines and how they might affect your valuation process, Grant Thornton can support you and we would be happy to have a conversation.