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Private Equity Investor Initiative Wins More Industry Backing

Tom Burroughes

31 March 2017

A raft of new investment houses have endorse a US-based industry lobby and netowrking group pushing for more clarity on the fees, and performance of private equity, a sector sometimes hobbled by lack of data.

Some 15 months after the Institutional Limited Partners Association published the first private equity industry standard “template” for reporting fees, expenses and carried interest to limited partners, the organization yesterday said fresh endorsements for its template have come from groups including Ares Management, Bridgepoint, Employees Retirement System of Texas, Lockheed Martin Investment Management Company, Oaktree Capital Management, Permira, Searchlight Capital Partners and Riverstone.

The organization's offices are in Washington DC and Toronto, Canada.  Its membership is global with LPs in Europe, North and South America, Asia, Africa and Australia.

"Following a successful year of template adoption by the global private equity community, the time is right to expand beyond the impressive base of users and support those LPs who seek enhanced transparency but have yet to implement for a variety of reasons," Peter Freire, chief executive of the ILPA, said.  "We now have experienced LP and GP adopters, as well as fund administrators and technology partners, all at the ready to assist others so all may enjoy the benefits of using the industry standard,” he said. 

A recent conference hosted by Family Wealth Report in New York heard that an issue for the private equity industry, and its investors, has been a lack of clear, consistent measures of how well such investments fare, fees, and other variables. 

The second phase of the ILPA plan involves initiatives this year, including making use of existing template users' experiences to identify best practices for implementation, including raising awareness of the range of solutions from technology providers and fund administrators; creating "Communities of Practice" to exchange perspectives of reporting professionals using the template and provide recommendations for further development and support, and providing new guidance on how data is overseen.

Scott Evans, deputy comptroller-asset management and chief investment officer for New York City, said the reporting template has benefited his team and the wider industry. "We view the ILPA Reporting Template as the best standard for collecting fee and expense data for private market funds and a crucial step towards automation in the industry. Mandating the completion of these templates from all of our private market GPs has improved the transparency of fees and expenses, and allowed the New York City Office of the Comptroller's Bureau of Asset Management to better assess all fees and expenses from our GP relationships. Having the information in a standardized format has fostered a higher level of transparency for our staff and Trustees, and saved considerable time and effort."