IPEV issues reporting guidelines

The revised guidelines feature an expanded list of ‘essential disclosures’ but do not mandate a specific submission format.

The International Private Equity and Venture Capital Valuation (IPEV) board has placed its final touches on a set of reporting guidelines designed to help standardise the way GPs share fund information with investors.

The guidelines focus primarily on “what information is most important to investors” and is not typically included in accounting reports or statutory financial statements, according to an IPEV statement. And “to accommodate differences between various fund structures and investment styles, the IPEV [guidelines] do not mandate a specific format for GPs to deliver information”. 

Compared to reporting guidelines released by the Institutional Limited Partners Association (ILPA), IPEV’s guidelines are more principle-based. IPEV said this was to allow a degree of flexibility in how fund information was shared with LPs. ILPA has argued that doing so comes at the cost of greater harmonisation in the structure and composition of GPs’ reports – a goal some call impractical considering the diverse range of fund types in market. 

Compared to the board’s draft guidelines in April, which opened a two-month consultation, the final guidelines include more “essential disclosures” that GPs should include in their fund reports. In the past ILPA has argued that IPEV’s segregation of “essential disclosures” from “additional disclosures” will lead to multiple data requests by some investors seeking a high level of transparency. The final guidelines call for more essential disclosures around parallel fund structures, the fund’s profit and loss allocation and distribution provisions. 

For the most part the overall format is “very similar to the draft that was released in April”, IPEV Board member David Larsen of Duff & Phelps said in a prior interview. “The primary changes relate to making sure that we are as clear as we can possibly be in our language. This is a document that will be used globally, so it requires a sharp pencil in going through the words to make sure they mean the same thing to different people in different jurisdictions.”

IPEV chair Emile Van Der Burg said in a statement: “I trust that our investor reporting guidelines will greatly facilitate greater consistency and transparency in communications from GPs to LPs. I am particularly proud of the close collaboration between GPs, LPs and service providers to enhance best practices for this dynamic and increasingly important industry.”