Limited Partners Group Releases PE Fee Reporting Template

The Institutional Limited Partners Association (ILPA), a group that includes CalPERS, CalSTRS and a dozen other large pension funds, released a template on Friday designed to standardize and improve the reporting of fees associated with private equity investments.

The ILPA has no authority to force general partners to adopt the template. But it appears several firms, such as the Carlyle Group and others (see below) have endorsed its use.

From Financial News:

The template would detail all capital collected from investors and portfolio companies, including fees charged, fund expenses, carried interest amounts and income received through related parties or parallel vehicles to the fund.

The fee reporting template was created after consulting nearly 50 global investor groups and 25 fund manager organisations.

[…]

Though the template is not legally binding, a spokesman for ILPA remained confident it would be adopted across the sector. He said: “We have received broad-based input, feedback and support from numerous private equity firms and we remain confident that it [the template] will be adopted as an industry standard.”

Industry expert Phalippou also welcomed the launch as a major step forward.

He said: “I think it will help a lot. When people see how much we are talking about, and it is right in front of them, they can no longer keep their head in the sand and pretend they do not know, cannot get the information, or that they wish they could but it is too costly.”

But he added a note of caution: “There are still things missing though – like expenses charged directly to the company – and I am unclear about unrealised carried interest. But it is a great start, even if it is not mandatory.”

The GPs that have said they support the use of the template:

Cambridge Associates

Carlyle Group

Capital Analytics

CEM Benchmarking

Conifer Financial Services

TorreyCove Capital Partners

Upwelling Capital

Photo by thinkpanama via Flickr CC License