Colleague Spotlight: Quinn Shearer, Managing Director

Quinn describes his core expertise as: "We primarily value operating companies that are not publicly traded and therefore do not have public market pricing." The work involves calculating value based on expected cash flows or by considering market-based transactions within the company's industry.

His interest in this field was sparked early in his career while working at the finance group at Sea Island. He assisted with a complex valuation project for the family-owned business, which required valuing diverse components including hotel and golf operations, real estate, and utilities.

Quinn highlights a major misconception in the field: that smaller companies are easier to value than larger ones. He argues the opposite is often true:

• Small companies may lack audited financial statements or sophisticated forecasting.

• They often require more adjustments to normalize earnings, such as owner compensation not being at market levels or personal expenses running through the business.

"In general, the financial statements and forecasts for larger companies are usually cleaner which ultimately takes less time," he notes.

A key intellectual challenge for Quinn is the reliability of the market approach to valuation. While this approach generally assumes market transactions occur at reasonable prices with rational investors, recent developments like meme stocks present a clear contradiction.

"I think we've all seen days where there is clearly negative news and the stock market goes up... The question presented is how reliable are market prices for valuing other similar assets and should we always rely on those market prices."

His conclusion is that it "depends on each situation," emphasizing the need to closely consider the unique circumstances of every comparable transaction—both public stock prices and company M&A transactions—when applying and weighting valuation multiples.

Quinn emphasizes staying at the forefront of the industry by thinking proactively about new challenges rather than relying solely on past precedent. His team collaborates closely with auditors and professional advisors to ensure the incorporation of new methodologies and model refinements.

He is also interested in the integration of AI for efficiency, particularly for research, while recognizing the need to maintain human judgment, protect confidential information, and clearly explain all conclusions and assumptions.

Due to the growth in private equity, Quinn's group spends significant time working with private equity (PE) funds, specific fund interests, and their portfolio companies.

Current PE-focused work includes:

• Mark-to-market valuations for fund assets and portfolio companies.

• Valuations of fund management companies.

• Valuations of carried interests for fund partners.

• Valuations of illiquid fund interests for investors.

Quinn's unique approach—a willingness to view each problem with a fresh perspective—allows his team to value the most unique and bespoke assets, including highly volatile interests such as a carried interest in a fund holding cryptocurrency Restricted Token Units.

Quinn's professional perspective on risk and consequence is deeply influenced by his personal interests. As a mountaineer and ice climber born with a congenital heart defect, he had to constantly evaluate acceptable risk with potentially significant consequences in his hobbies.

Levels of risk are an important consideration in any valuation project with higher risk generally resulting in lower valuations. However, higher risk can also correlate with higher returns and higher volatility which is beneficial for certain assets such as those with call option behavior.

Quinn Shearer, ASA, Managing Director, specializes in the valuation of privately held businesses, intangible assets, and complex capital structures involving stock options and warrants. He brings deep expertise in valuation for tax and financial reporting purposes including purchase price allocations, asset and goodwill impairments, derivatives, and equity compensation. Shearer has served client industries spanning cryptocurrency, distribution, foods, hotels, hospitals, information technology, logistics, manufacturing, oil and gas services, professional services, publishing, real estate, telecommunications, textiles, and transportation. He was previously a partner with Adams Capital. Shearer holds a B.S. in Management from Georgia Institute of Technology. He currently serves as Chair of the Board of Directors for the Bobby Dodd Institute and is a former President and Treasurer of the Atlanta Chapter of the American Society of Appraisers. Based in Atlanta, Georgia, Shearer primarily serves clients in the Southeast U.S. region.

Contact

Email: qshearer@gagroup.com