🎥 Lincoln International's Brian Garfield - how is AI impacting private markets valuations?

Welcome back to the Alt Goes Mainstream podcast.Today’s episode dives into the nuances of the numbers to discuss valuations, underwriting, and the state of private markets.We sat down with Brian Garfield, Managing Director and Global Head of the Portfolio Valuations practice within Lincoln International’s Valuations and Opinions Group.Brian provides valuation and transaction opinion services to public and private alternative asset managers. He leads a team of over 225 professionals, providing strategic oversight for the Global Portfolio Valuation practice which includes both our Portfolio Valuation and Asset Backed Finance teams situated across North America, EMEA and APAC. Brian’s team also produces the Lincoln Private Market Index, Lincoln Senior Debt Index, and Lincoln Default Index.Brian and his team specialize in estimating the fair value for an array of financial instruments, including direct investments in senior, unitranche and subordinated loans, as well as preferred equity, common equity, option and warrants. His expertise also includes valuing secondary fund interests, co-investments, and GP stakes.Prior to joining Lincoln, Brian spent more than six years at Duff & Phelps, LLC, where he advised a wide range of alternative asset managers.Brian and I had a fascinating conversation about the current state of valuations and underwriting in private markets. We discussed:How is AI impacting SaaS company valuations?Taking stock of the current fundamentals of private companies.Is the “iceberg of deals” melting?How indices and benchmarks are bringing a “deeper level of transparency than price” to a market.How is continuation vehicle activity impacting private markets?How has the growth of evergreen funds impacted the world of valuations?Thanks Brian for sharing your expertise, insights, and passion about private markets and valuations.Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work - writing and podcasting about the convergence of private markets and private wealth since December 2020.A word from AGM podcast sponsor, Ultimus Fund SolutionsThis episode of Alt Goes Mainstream is brought to you by Ultimus, the full-service fund administrator and transfer agent powering asset managers in private and public markets. As alts go mainstream, you need real expertise to handle complex fund structures, connect with key distribution partners, and handle sophisticated compliance, reporting, and transparency demands.That’s Ultimus: high-tech, high-touch solutions for over 450 clients and 2,500 funds with $775B in assets under administration. Backed by an expert team of over 1,200 employees, they place client service at the core of their business, helping you navigate complexity during your fund structuring or launch and then supporting you through every stage of growth. Whether you’re already in the market or thinking about entering private wealth, you can trust their team’s deep expertise in retail alternatives to help you reach your goals.Learn more: ultimusfundsolutions.com or email info@ultimusfundsolutions.com.We thank Ultimus for their support of alts going mainstream.Show Notes00:00 AI Hype Reality Check01:01 A Message From Our Sponsor, Ultimus01:57 Introducing Brian Garfield04:16 Art Versus Science in Valuations05:00 Tech And Automation06:15 Valuation For New Investors07:45 Anchoring To Purchase Price09:03 Entry Versus Exit Nuance10:23 Private Versus Public Multiples11:03 Lincoln Private Market Index12:17 AI And Software Bifurcation17:13 Key Market Health Signals18:34 2021 Vintage Leverage Logjam20:42 Exit Delays And Continuation Vehicles22:05 Winners, Losers, And CVs23:28 Iceberg of Exits24:41 Private Credit Yields Shift27:10 Underwriting Gets Scrubbed30:18 AI and Specialist Edge32:15 Energy Shock Valuation Risk36:48 Public Private Convergence41:47 Evergreen Valuation Cadence43:16 Tech Standards and AI Queries45:41 Backtesting and Transparency48:23 Closing ThoughtsEditing and post-production work for this episode was provided by The Podcast Consultant.Join over 15,800 Substack subscribers & followers who are thought leaders and executives from top private markets firms and wealth management lik