Up to now I have basically ignored Markel Ventures in terms of coming up with valuation estimates but these businesses are actually starting to become material overall. Net income (in thousands) was $13,475, $7,746, and $4,211 in 2012, 2011, and 2010 respectively but this is understated due to the presence of amortization charges which are not really economic expenses. If we add back the $15 million of intangible amortization in 2012, Ventures had economic net income of around $28.5 million. Even at a modest 10-11x multiple we are looking at around $300 million of value at Ventures. That's around $21-22/share of value based on the share count after the ALTE merger, and I'm basically just pulling a multiple out of a hat here. Over time a "two column" type of approach that many use for Berkshire may become more relevant for Markel.
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