June 6, 2018
Understanding the Valuation Bridge is how LPs can analyze deal level diligence. It has been used for more than a decade by LPs and GPs to understand how portfolio company value creation drives investment returns.
LPs find understanding the valuation bridge particularly useful during the manager selection due diligence process. In this white paper, we will explore the ins and outs of the valuation bridge from the LP perspective. In part one, we will highlight the questions the bridge can help an LP answer. Next, we will define the building blocks of the bridge. Lastly, we discuss some constraints and drawbacks of the bridge. Finally, we have a short summary and some of our personal thoughts on the valuation bridge.