The Guidelines Monitoring Group has published its fourth report on improving transparency and disclosure in the private equity industry.
The report summarises the findings of a review on compliance of various private equity firms (and their portfolio companies) with the Guidelines for Disclosure and Transparency in Private Equity which were published in November 2007.
The report highlights the following:
- the findings of the report identified a higher level of conformity with the Walker Guidelines than in previous years;
- the quality of disclosure amongst portfolio companies varied significantly (the report found that there is a clear difference in the standard of reporting of the new entrants under the Guidelines compared to those companies that had previously reported); and
- the financial reporting of private equity owned companies compares well against FTSE 350 companies (although, as above, this differs when comparing previous reporters to new reporters under the Guidelines).
The Group also reports that it is currently working on the following:
- considering an addition to the Guidelines which would require portfolio companies to disclose that the company has adopted the Guidelines;
- conducting a consultation process with private equity firms about a possible amendment to the definition of a private equity firm for the purpose of the Guidelines; and
- continuing to review the enterprise value thresholds.