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Lack of MarketabilityLack of Marketability

There is no doubt that one of the most difficult areas of valuation is quantifying and justifying a lack of marketability adjustment. While it is undisputable that some downward adjustment is justified to account for a lack of ability to convert an investment into cash, the magnitude of that adjustment is often a contentious subject. Valuation professionals are being challenged to refine their conclusions.

Annika M. Reinemann

February 1, 2008

13 Min Read
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Annika M. Reinemann

There is no doubt that one of the most difficult areas of valuation is quantifying and justifying a lack of marketability adjustment. While it is undisputable that some downward adjustment is justified to account for a lack of ability to convert an investment into cash, the magnitude of that adjustment is often a contentious subject. Valuation professionals are being challenged to refine their conclusions. Practitioners and users of valuation reports should be familiar with the latest thinking on marketability and illiquidity. Here is a start.

To know where we are now, we need to know from whence we have come. Z. Christopher Mercer and Travis W. Harms offer an excellent historical analysis. In their December 2001 articl...

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About the Author

Annika M. Reinemann


Ms. Annika Reinemann is the Managing Director of Brittan Park Valuation. Ms. Reinemann's work experience includes the valuation of early stage high-tech and life-science companies in areas such as securities design, license valuations, mergers and acquisitions, pre-IPO valuation, equity allocation, and options pricing. Her project experience encompasses issuance of opinions regarding fairness, solvency, due diligence, and intellectual property. 

Her speaking engagements have included presentations at the American Society of Appraisers, California Association of Certified Public Accountants, BIO 2000, the East Bay Estate Planning Council, the American Society of Appraisers, as well as guest lectures at the University of San Francisco McLaren School of Business and University of Wisconsin, Madison. 

Ms. Reinemann received her Bachelors' Degree in Business Administration with an emphasis on Entrepreneurship from the University of Karlstad (Sweden) in 1994 and a Masters Degree in Business Administration with an emphasis in finance from the University of San Francisco in 1996. Ms. Reinemann holds a Chartered Financial Analyst designation and she is an Accredited Senior Appraiser of the American Society of Appraisers. Prior to founding Brittan Park Valuation, Ms. Reinemann was Managing Director at Cogent Valuation in San Francisco. 

Ms. Reinemann is a founding member and executive committee member of the Fair Value Forum, a member of the valuation editorial committee for Trusts & Estates, and a member of the Santa Clara CountyEstate Planning Council. She also carries memberships in the CFA Institute as well as the American Society of Appraisers.

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