A holding discount is the reduction applied to the theoretical net asset value (NAV) of a holding company to reflect structural frictions — double taxation of dividends, holding operating costs, illiquidity of underlying assets and governance complexity. In business valuation, holding discounts typically range from 10% to 30% depending on the transparency of the structure, the quality of underlying assets, the distribution policy and the holding type. It is distinct from — but may cumulate with — the minority discount and the illiquidity discount.

‍

Example: a Swiss family holding owns industrial participations with a total restated NAV of CHF 28.0 million. A 20% holding discount (CHF 5.6 million) is applied to reflect annual holding costs of CHF 350,000, latent capital gains tax on unrealised appreciation and governance complexity — resulting in a holding value of CHF 22.4 million. This discount is documented by reference to listed holding company discount databases and sector practice.

‍

Hectelion calibrates holding discounts with a documented methodology drawing on listed holding company market data and specific structural characteristics of each Swiss or French holding.