Duke Street Capital plans to embrace the Walker reporting requirements across the majority of its portfolio, according to Buchan Scott, a partner at the firm.
This is despite Scott estimating that not more than a quarter of Duke Street’s portfolio would meet the Walker criteria. Scott would be surprised if many of his peers in the mid-market are not considering doing the same.
Duke Street will probably not comply with the Walker Report on companies that are close to exit, he said.
The proposals place reporting requirements on companies acquired in a public-to-private transaction with a market capitalisation at the time of acquisition in excess of £300 million (€419 million; $619 million), or in a secondary or other transaction with an enterprise value greater than £500 million.
The companies must generate more than 50 percent of their revenues inside the UK and employ equivalent to more than 1000 full time UK workers. Walker said approximately 65 companies would fall under this criteria.
Bruce Hanton, a partner at law firm Ashurst, said: “The market may be surprised that the guidelines will only apply to approximately 65 companies. This, however, is a reflection of the cross-border nature of the majority of buy-outs by large UK-based private equity firms.”
Scott said: “The bar set out is high but we think transparency and communication is good for business. It’s good to make disclosures to a larger audience as we need their money.” While Scott did not think the compulsory bar should be lowered in the short term, he said this could be the subject of a review next year.
“It wouldn’t be the end of the world if our hands are tied. What you don’t want is venture capital companies restrained,” he said.
Scott also said the decision to set up an independent database run by UK trade body the British Private Equity and Venture Capital Association was “a vital decision” as more trust was needed in the industry’s data generally. “One of the biggest failures of private equity has been in communicating to the wider economy,” he said.
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