
Signals
Highlights and conversations. Work that draws focus, signals movement, or holds a particular charge.
Signals • Spring-Summer 2025 • Land
Dialogue Across the Atlantic: Guillermo Ortiz de Zárate on Alignment, Identity, and What Lies Ahead
By Hafiz Imtiaz Ahmad
HIA: Congratulations on your new role as CEO of the American Society of Appraisers. Stepping into this position is both an exciting opportunity and a significant responsibility. Could you share your short- and long-term vision for ASA? What are your key priorities as you begin this journey?
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GOZ: Thank you! I’m honoured to step into this role at ASA, an organisation with a deep legacy and a membership that plays a crucial role in the economy. My immediate focus is on understanding our members' needs, strengthening our value proposition, and ensuring ASA continues to be recognised as the gold standard for credentials, education, and professional resources. In the short term, that means hitting the road, meeting with our members, and listening—really listening—to what they need from their professional society. I want to build relationships, hear directly from our community, and ensure our staff, volunteers, and leadership are aligned with a shared vision.
Long term, my focus is on positioning ASA as the essential partner for valuation professionals throughout their careers. That means empowering members with cutting-edge education, ensuring our credentials remain the industry standard, and leveraging technology and data to make ASA more efficient and impactful.
We also have a responsibility to shape the future of the valuation profession by engaging with policymakers, industry leaders, and the next generation of appraisers. If ASA is to remain a leader, we need to be proactive—anticipating change rather than reacting to it.
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HIA: You have held key leadership roles, including as Chief Innovation and Information Officer at NCARB, and now as the CEO of ASA. How do you see the role of leadership evolving in well-established professional organisations? How do you balance innovation with the traditions and values that have shaped these institutions over the years?
GOZ: Leadership in professional organisations has evolved from simply maintaining traditions to actively adapting and innovating while respecting those traditions. What I’ve learned is that innovation and legacy don’t have to be at odds—they can and should coexist.
At NCARB, we overhauled how we used technology and data, but the core mission—protecting public health, safety, and welfare—never changed. The same is true at ASA. Our profession is evolving, with advancements in AI, automation, and new regulatory challenges. ASA must embrace technology and data to help appraisers stay ahead of these shifts while ensuring that we continue to uphold the high standards of professionalism and ethics that have always defined ASA.
For me, leadership is about being a partner in our members’ careers. That means ensuring they have the tools, resources, and support they need to thrive. It’s about asking the right questions, listening to diverse perspectives, and being unafraid to take smart risks when change is necessary.
HIA: Member engagement is a cornerstone of professional associations. In your experience, what strategies have you found most effective in keeping members actively involved and invested in their organisations? Are there any new approaches you are considering for ASA?
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GOZ: One of the most important things I’ve learned is that members engage when they see real value in their membership. That value looks different to different people—some join for credentials, some for networking, some for education, and some for advocacy. ASA needs to clearly articulate and deliver that value in ways that matter to each member.
At NCARB, I focused on making engagement data-driven and personalised. People engage when they feel heard and when participation is easy. One of my goals at ASA is to use data to better understand our members’ needs and ensure we’re offering the right programmes and resources to keep them engaged.
Another approach is rethinking how we communicate. We live in a digital world where people expect quick, clear, and useful information. ASA needs to meet members where they are—whether that’s through more interactive online engagement, mobile-friendly tools, or more direct member feedback channels.
Most importantly, I believe engagement starts with leadership. I want to be accessible to our members, which is why I’m committed to a listening tour, one-to-one meetings, and regular communication to ensure ASA is providing the right support at the right time.
HIA: You’ve had a diverse and dynamic career spanning different industries and leadership roles. What key lessons have you learned about leading professional organisations? What advice would you give to professionals looking to contribute meaningfully to their industry and make an impact?
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GOZ: One of the biggest lessons I’ve learned is that leadership is about creating an environment where people feel empowered to contribute. Whether it’s staff, volunteers, or members, people engage when they feel like their work matters and their voices are heard.
I also believe that data and transparency are powerful tools. When I worked at NCARB, we were sitting on a massive amount of data, but no one had ever asked the right questions. We used that data to answer a simple but important question—how long does it take to become a licensed architect in the U.S.? That one answer led to new conversations, new policies, and real change. ASA has similar opportunities to leverage data to make better decisions and advocate more effectively for our profession.
For professionals looking to make an impact in their industry, my advice is simple: get involved. Volunteer, mentor, contribute to discussions, and don’t be afraid to challenge old ways of thinking. Change happens when people step up and bring new ideas to the table.
HIA: Professional roles in leadership often come with high demands and responsibilities. How do you personally approach balancing strategic leadership with day-to-day operations? Are there any guiding principles or experiences that have shaped your approach to leadership and decision-making?
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GOZ: For me, leadership is about prioritisation—focusing on what truly moves the needle. One of my key guiding principles is: focus on what you can control and maximise impact.
There are always competing priorities, but I believe in focusing on the most impactful things first. I encourage my teams to make decisions quickly, learn from mistakes fast, and innovate continually. Leadership isn’t about being afraid to take risks—it’s about making calculated, smart decisions and adjusting when needed.
I also believe in building a human-centric environment. At the end of the day, ASA is about people—our members, our staff, and our volunteers. That’s why it’s important to foster collaboration, encourage debate, and create a culture where people feel empowered to contribute.
Finally, I don’t believe in reinventing the wheel for the sake of change. ASA has a strong foundation, and my role is to build on that success, modernise where necessary, and ensure we are positioned to support our members today and in the future.
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HIA: This conversation reminds us that leadership isn’t just a title—it’s a decision made every day. Thank you for sharing your insight.
Signals • Spring-Summer 2025 • Land
Volatility in growth share valuation, a fair reflection of the correlation between risk and reward?
By Ben Macnaghten
Growth shares typically participate in distributable equity proceeds above a hurdle on an exit or following vesting, and can have catch-up rights, differing participation rights above differing hurdles, and other rights depending on the complexity of the scheme (for simplicity, I refer to a singular hurdle in the rest of this article). These characteristics provide that their value is in future growth, sometimes referred to as ‘hope value’.
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Given this, specialist approaches are required to value them. Whilst their current value can be determined using a liquidation approach—where the valuer assumes a liquidation at the valuation date and then distributes equity value through a waterfall—this method is not acceptable to most tax or other authorities, as the shares' value is predicated on and dependent upon growth, and can only be realised in the future.
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Thus, two approaches are used in common practice:
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The Probability-Weighted Expected Return Method (PWERM)
Option Pricing
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In this article, we look specifically at option pricing, which includes Monte Carlo, Lattice models, Black-Scholes, and derivations thereof. Under this methodology, growth shares are valued as if they were options, reflecting their participation above a hurdle.
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Following the calculation of the current equity value of the company, the key inputs for option pricing include:
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The hurdle
Time period/option life
Risk-free rate
Dividend yield
Volatility
Of these inputs, the hurdle is typically a prescribed amount or mechanical calculation based on an internal rate of return or multiple of investment. The time period to an exit/liquidity event is advised by management, the dividend yield is typically nil (as most companies issuing growth shares are investing for growth), and the risk-free rate is usually approximated using bond yields—where there is little subjectivity, and in any case, its impact is generally insignificant.
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By comparison, volatility is subjective and can have a very significant impact on the final value of growth shares. An example is a growth share valuation I am working on now: should a 35% volatility be used, the resulting value per growth share is £1.83/share, whilst a volatility of 30% results in a value of £1.05/share. This may sound like a small variance, but when extrapolated across an entire share plan, it leads to a differential in value—in this case, of over £100k. Thus, a 17% variance in volatility leads to a 74% difference in value. It is a critical input.
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So, what is volatility? It is defined by Investopedia as follows:
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"Volatility is a statistical measure of the dispersion of returns for a given security or market index. It is often measured from either the standard deviation or variance between those returns. In most cases, the higher the volatility, the riskier the security." ¹
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Accordingly, it comes as no surprise that volatility and risk are closely related in financial markets, with volatility often used as a measure of risk.
However, whilst there is a positive correlation between risk and return, to quote Investopedia again:
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"A more correct statement [on whether there is a positive relation between risk and return] may be that there is a positive correlation between the amount of risk and the potential for return. Generally, a lower-risk investment has a lower potential for profit. A higher-risk investment has a higher potential for profit but also a potential for a greater loss." ²
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Yet with option pricing when valuing growth shares, the higher the volatility, the higher the value. And so the question presents itself: does volatility fairly reflect risk?
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Illustrating the point, studies suggest that 90% of startups fail. According to the National Venture Capital Association in the US, 25% to 30% of venture-backed startups fail. US private equity-owned companies accounted for 11% (75 out of 697 filings) of all corporate bankruptcies in 2024, despite the fact that private equity accounts for 6.5% of the US economy.
Yet the higher the volatility—regardless of the likelihood of failure—the higher the price the recipients of growth shares must pay when valued under option pricing.
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In my eyes, the positive correlation between growth share value and volatility is clear, whilst the correlation between risk and return is clearly more nuanced. My advice would be that whenever instructing a valuation of growth shares, it is imperative to instruct a specialist who understands the complexity of the job at hand.
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¹ https://www.investopedia.com/terms/v/volatility.asp
² https://www.investopedia.com/ask/answers/040715/there-positive-correlation-between-risk-and-return.asp