ILPA to introduce reporting standards

The Institutional Limited Partners Association, the global organisation representing more than 230 institutional investors, has said it will release a set of financial reporting standards in November.

The rules are designed to increase uniformity and transparency in financial information provided to private equity investors. While they focus on private equity, they are also relevant to private equity real estate.

The roll out will include new guidelines for capital calls, distribution notices and portfolio company quarterly reports. The ultimate goal is to “create consistency, accuracy and expediency in partnership financial reporting”, ILPA said in a statement.

ILPA also noted that its Private Equity Principles have been endorsed by 135 organisations globally since being introduced exactly one year ago. The organisations include public and corporate pension funds, sovereign wealth funds, endowments, foundations, family offices and a number of private equity investment firms and advisory firms.

The Private Equity Principles pertain to “strong governance, appropriate transparency and the alignment of interests between LPs and GPs”, according to an ILPA statement. However ILPA executive director Kathy Jeramaz-Larson said they do not provide a “one size fits all approach to negotiating an LPA”.

A survey of private equity participants over the last several months revealed that most LPs use the ILPA Principles to help assess GPs, and that a majority of the responding GPs believe the Principles will enhance GP/LP relations.