Behind the Numbers: Our Updated Asset Valuation Methodology
At Splint Invest, one of our core principles is transparency. We want investors to understand not only what we do, but also why we do it.
Over the past months, we have reviewed and refined the way we calculate the monthly fair value of assets on our platform. The goal was not to make valuations more optimistic or more conservative, but to make them more consistent, rule-based, and aligned with the actual lifecycle of an investment.
Why change the methodology?
Alternative assets are not static. The information available about an asset changes throughout its holding period.
When an asset has just been acquired, there is often very limited market information available. As time passes, broader market trends become more relevant. And once an asset approaches its planned exit period, individual transactions and buyer interest become far more important than general market movements.
To reflect this reality, we now distinguish between four different valuation phases.
Phase 1: The first valuation update after release
The first valuation update is based primarily on the acquisition conditions.
In some cases, we are able to purchase assets at more attractive prices than those typically available to other buyers. This can happen because of long-standing relationships with experts, direct sourcing opportunities, or institutional buying power.
When such an acquisition advantage exists, we incorporate part of that benefit into the first valuation update.
However, the value increase will not necessarily match the purchase discount one-to-one.
Why?
Because any future sale also involves costs such as transaction fees, logistics, insurance, commissions, and other selling expenses. These costs need to be reflected in the fair value calculation.
As a result, an asset acquired at a 20% discount may not automatically receive a 20% valuation increase.
Phase 2: Monthly updates before the exit window
This is the most significant change to our methodology.
Previously, we performed individual asset-level valuations throughout the entire holding period. Going forward, assets that are still outside their planned exit window will primarily be adjusted based on relevant market indices.
Whenever possible, we use highly specific indices that closely match the underlying asset category.
Examples include:
- Art market indices
- Wine market indices
- Luxury watch market indices
- Collectibles and trading card indices
- Precious metal benchmarks
The reasoning is simple: before an asset reaches its intended sale period, overall market movements are generally more meaningful than attempting to estimate a precise asset-level value every month.
This approach improves consistency, reduces subjectivity, and ensures that valuations reflect broader market developments.
Phase 3: Monthly updates within the exit window
Once an asset enters its planned exit window, we switch back to individual asset-level valuation.
At this stage, the focus shifts from market trends to actual realizable value.
To determine a fair value, we review:
- Recent comparable transactions
- Auction results
- Dealer and marketplace listings
- Expert feedback
- Actual purchase offers where available
This allows us to estimate what the asset could realistically achieve if sold during the current period.
Because the investment is now approaching its intended exit, individual asset characteristics become significantly more important than general market indices.
Phase 4: Assets beyond the exit window
If an asset remains unsold after its planned exit window, the valuation methodology changes again.
At this point, we switch to what we call a liquidation value approach.
Liquidation value reflects the price we believe can realistically be achieved if a sale must be completed under increasing time pressure.
This is naturally not the ideal scenario. However, it reflects an important principle of our investment process: discipline.
Holding assets indefinitely in the hope of achieving a higher future price can create significant opportunity costs and increase portfolio risk. By incorporating liquidation value, we acknowledge the reality that every investment strategy requires clear rules and accountability.
The role of recovery analyses
Another important element of our process is the recovery analysis.
Whenever an asset declines by 25% or more relative to its investment value, we perform a dedicated review.
During this analysis, we assess the probability that the asset can recover its value within a reasonable timeframe.
If our assessment indicates a recovery probability below 50%, we initiate a vote among all co-owners and recommend considering a sale.
Importantly, the final decision always remains with the co-owners.
Our role is to provide transparent analysis and recommendations. The ownership rights remain with the investors.
A more rule-based investment process
The objective of these changes is not to generate higher valuations.
The objective is consistency.
By linking valuation methods to clearly defined lifecycle stages, we reduce subjectivity and ensure that all assets are evaluated according to the same principles.
Successful investing requires discipline not only when buying assets, but also when valuing and exiting them.
This updated methodology is another step toward making alternative investing more transparent, professional, and predictable for all investors.
As always, we welcome your feedback and questions.
