Apollo, Blackstone back ILPA fee guidelines

Nine global asset management firms, including The Carlyle Group, KKR, and Blackstone, have backed ILPA’s new fee reporting template.

From early next year several private equity general partners will use a new template for reporting fees, expenses and carried interest data to LPs.

In total, nine GPs have publicly supported the template published by LP-centric body ILPA in January as part of its Fee Transparency Initiative. When the template was initially launched, it was endorsed by The Carlyle Group and TPG. Subsequently Advent International, Apollo, Blackstone, CCMP, Hellman & Friedman, KKR and Silver Lake have all given the guidelines their public backing, the organisation said in a statement on Thursday.

The purpose of the initiative is to establish more robust and consistent standards for fee and expense reporting, and compliance disclosures among investors, fund managers and their advisers.

A full transition by supporters to the template system is expected to take up to two years due to the “long-term nature of private equity funds, and the complexity surrounding the technology infrastructure required to automate the production of this data,” ILPA said.

In the LP community, 56 institutional investors have supported the initiative, while 125 ILPA member organisations said they plan to use the template in their negotiations with GPs around new fund commitments.

“Investors understand that there is a cost to producing excellent returns – they simply ask that the fees, expenses and profit allocation accurately reflect, in both their structure and magnitude, the value created, and be fully disclosed,” ILPA CEO Peter Freire said.