Composite Price

- An aggregated price derived from multiple sources or trades, providing a representative value for illiquid or thinly traded securities.

Scenario:

A private equity fund is valuing a portfolio company for quarterly reporting. It uses a composite price derived from multiple data sources, including recent transactions and market comps.

Why This Matters:

Provides accurate, market-reflective valuation, supports fair value reporting, increases transparency, reduces bias.

The Process:

Valuation teams aggregate prices from different sources, apply weighting, and document the methodology.