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Private Equity Fee Template ‘Builds Steam’

The ILPA says it has made “significant progress” in the promotion and adoption of a template designed to increase transparency around fees.

Nearly a year after its debut, the Institutional Limited Partners Association’s (ILPA) fee reporting template is showing signs of entrenchment within the private equity industry.

The template—an effort to drive uniformity and clarity in fee reporting practices—has made “significant progress” since it was released in January 2016, the ILPA has said, with adoption growing among both limited partners (LPs) and general partners (GPs).

As of November of last year, the ILPA said more than 125 member organizations had indicated they would use the template in negotiations with GPs over new fund commitments. A further 56 allocators and nine private equity managers had also publicly endorsed the template at that time, including the California Public Employees’ Retirement System, the Florida State Board of Administration, Apollo, and Blackstone.

And the list keeps growing, with private equity firm Searchlight Capital endorsing the template just last week.

“We are pleased to adopt the ILPA fee reporting template,” founding partner Erol Uzumeri told Private Equity News in an interview published on Searchlight’s website. “We feel that transparency is an important part of the relationship between GPs and LPs, and we are committed to providing our investors comprehensive information that facilitates their monitoring activities.”

On Wednesday, Citco—a financial services company serving private equity firms—launched an automated reporting system specifically intended to help GPs comply with the ILPA’s fee disclosure requirements.

“Citco has a long-standing reputation for promoting more uniform and transparent reporting practices in the industry,” said Nick Perros, the firm’s head of private equity and real estate services. “The ILPA fee reporting tool makes it easier and more efficient for our clients to adhere to new transparency requirements.”

In a statement made in November, ILPA CEO Peter Freire said continued adoption of the template was “critically important” in the industry’s evolution toward “greater disclosure and transparency.”

“As the initiative builds a real head of steam with support from all corners of the asset class,” he said, “we are on the cusp of meaningful change that is in the long term best interests of all industry participants.”

Related: Taking the Guesswork Out of Private Equity Fees

| Amy.Whyte@strategic-i.com | 646-308-2775