E&Y: Lack of reporting standards ‘bewilders’ LPs

The wide variety of reporting methods used by GPs in real estate has caused LPs to increase their data requests three-fold, a senior partner at Ernst & Young contends.

Fund reporting standards in the real estate industry are “beyond the immediate horizon”, but in the meantime many GPs are not being as transparent about their portfolios as limited partners require.

Such are the views of Gary Koster, a partner and Americas Leader of Ernst & Young’s real estate fund services practice, writing today as a guest columnist on sister news service PrivateEquityManager.com.

“At a recent industry meeting on investment valuation, fund of funds managers were bewildered by the variation in both fund managers reporting of investment values and the level of analysis provided to support valuation conclusions,” Koster wrote in PEM.

Koster noted new real estate reporting rules from the California Public Employees’ Retirement System as being symptomatic of a failure on the parts of industry participants to agree on a common standard while also often failing to deliver transparent-enough reports to investors.

The full article appears on PEM.