Key Takeaways
- • The Institutional Limited Partners Association (ILPA), a trade group whose members include the retirement plans of public workers in California and Wisconsin, proposed new guidelines this week to standardize financial reporting by private-equity firms, according to the Wall Street Journal.
- • The proposal targets longstanding limited-partner frustration with the level of fee and return disclosure from private-equity funds.
- • ILPA has released templates and guidance intended to improve standardization, transparency and comparability in reporting for private funds, per publisher summaries of the story.
- • Undisclosed private-equity fees, including carried interest, can equal 1.5% or more of annual assets, according to a related analysis cited in the publisher's context materials.
Summary
A group of U.S. pension funds and other institutional investors is pressing private-equity firms to disclose more information about their fees and investment returns, the Wall Street Journal reported. The push reflects persistent frustration among limited partners with the industry's levels of transparency.
The Institutional Limited Partners Association, a trade group whose members include the retirement plans of public workers in California and Wisconsin, proposed new guidelines this week designed to standardize financial reporting by private-equity firms, according to people familiar with the matter cited by the Journal. The initiative is aimed at improving the comparability of fee and performance data across managers, a longstanding concern for institutional allocators who have increasingly committed capital to private markets.
According to the publisher's supplementary coverage, ILPA has released new templates and guidance intended to enhance standardization, transparency and comparability in reporting for private funds. Commentary in the publisher's context materials notes that the average value of undisclosed private-equity fees, including carried interest, can equal 1.5% or more of annual assets, or about half of a pension fund's total return, though that figure comes from a separate analysis and is not part of the Journal's reporting on the proposal.
For limited partners, the proposal signals a continued effort to close information gaps that have complicated fee benchmarking and performance attribution. Whether private-equity general partners adopt the proposed templates remains to be seen.
The Institutional Limited Partners Association, a trade group whose members include the retirement plans of public workers in California and Wisconsin, proposed new guidelines this week designed to standardize financial reporting by private-equity firms, according to people familiar with the matter cited by the Journal. The initiative is aimed at improving the comparability of fee and performance data across managers, a longstanding concern for institutional allocators who have increasingly committed capital to private markets.
According to the publisher's supplementary coverage, ILPA has released new templates and guidance intended to enhance standardization, transparency and comparability in reporting for private funds. Commentary in the publisher's context materials notes that the average value of undisclosed private-equity fees, including carried interest, can equal 1.5% or more of annual assets, or about half of a pension fund's total return, though that figure comes from a separate analysis and is not part of the Journal's reporting on the proposal.
For limited partners, the proposal signals a continued effort to close information gaps that have complicated fee benchmarking and performance attribution. Whether private-equity general partners adopt the proposed templates remains to be seen.
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