Sir David Walker, former chairman of Morgan Stanley, is to chair a new working group that will look at ways for the private equity industry to become more transparent.
The initiative has been launched by the British Private Equity and Venture Capital Association, a UK trade body, and is being backed by most of the UK’s biggest buyout firms. 23 firms have already signed up to the plan, including the likes of Apax, The Blackstone Group, and Permira.
In a joint statement, the firms said the industry was proud of its achievements and its recent growth, but accepted that more transparency was required. It said: “We believe there would be real benefit to all stakeholders if a regime of more effective disclosure took hold. This is why the industry is committed to undertaking this review”.
The BVCA said the working group would produce “a voluntary code addressing the levels of disclosure in the industry and how [the industry] should communicate with a wide range of stakeholders.” It said it would distinguish between all the different segments of the industry, “from small start-up financing to large buyouts.”
Sir David Walker, who will chair the group, is not only a former chairman of Morgan Stanley – where he remains a special advisor – but also a former executive director of the Bank of England, and chairman of the Securities and Investments Board.
City minister Ed Balls said, in response to the news: “I welcome today’s announcement from the BVCA and with it the commitment to increase transparency and disclosure. Private equity is an important part of the UK financial services sector and can play an important wider economic role creating jobs and developing companies.” Balls had encouraged the industry to be more transparent in an interview published only this morning.