The Institutional Limited Partners Association (ILPA) has launched a global implementation push in its effort to make private equity reporting more transparent and standardized.
Following the launch of its standardized fee-reporting template in January 2016, the ILPA is focusing on leveraging the experience of the early adopters to push global implementation and address the needs of investors that have expressed interest in the template but have not adopted it.
Specifically, the group wants to identify best practices for implementing the templates, including raising awareness about solutions from technology providers, fund administrators and other advisers. It also want to create “Communities of Practice” to exchange perspectives among reporting professionals using the template and solicit recommendations for further development and support.
The template has been endorsed by more than 60 North American LPs, including many of the largest public pension plans. Some have mandated that the template be used as a condition of investment. According to the ILPA, 160 GPs also use the template. It has been endorsed by Ares Management, Bridgepoint, the Employees Retirement System of Texas, Lockheed Martin Investment Management Company, Oaktree Capital Management, Permira, Searchlight Capital Partners and Riverstone, among others.
“We view the ILPA reporting standard as the best standard for collecting fee and expense data for private market funds and a crucial step towards automation in the industry,” Scott Evans, deputy comptroller-asset management and CIO for the New York City Retirement Systems, stated. “Mandating the completion of these templates from all of our private market GPs has improved the transparency of fees and expenses and allowed our office to better assess all fees and expenses from our GP relationships.”
More than $1.5 trillion in private equity commitments has been raised over the past 10 years, according to a Preqin Private Equity Top 100 report released in February 2017.
The ILPA said the templates should make it easier for investors to assess deals by looking at standardized information presented in a common format. In a statement, Peter Freire, CEO of the ILPA, said limited and general partners, fund administrators and technology partners, are adapting the template and “all are at the ready to assist others, so everyone may enjoy the benefits of using the industry standard.”
The standard was needed, Freire continued, because in order to “cleanly compare the numerous and diverse PE fund cost structures, limited partner investors need a single reporting template that is recognized by all stakeholders as the ‘go-to’ gold standard. General Partners who have adopted our Template understand that this standard will benefit their funds as well, as they only have to complete a single report for all their investors.”
By Chuck Epstein