"Now that private equity firms have to carry the companies they own on their books at market value rather than at cost, investors are holding their breath to see how drastically they have been marked down at year end. If those writedowns on the value of the companies are significant investors may become more aggressive in seeking to cut their promised commitments."
I need to understand the key sentence in this article:
Now that private equity firms have to carry the companies they own on their books at market value rather than at cost.
It seems that I have seen this before, but thought nothing of it. I know cash is going to get tight for the next two plus years, but what is the impact of the market value aspect?
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