What is a typical total minimum discount for active investors?

A typical total minimum discount for active investors is considered to be about 15%. This figure takes into account a variety of factors that can impact the valuation and attractiveness of an investment. Active investors, who often take a hands-on approach in managing their investments, may seek to negotiate for a discount to mitigate perceived risk or to account for the less liquid nature of certain investments.

Furthermore, a 15% discount may reflect the desired return on investment that active investors expect to achieve. This percentage balances the opportunity cost of capital with anticipated business performance and market conditions. The discount can be attributed to various risks such as market volatility, operational uncertainties, and the need for additional resources for management and oversight.

Understanding this typical minimum discount is essential for investors when evaluating the potential return on their investment, particularly in situations where they may be taking on significant responsibilities or risks associated with the management of the asset.