The Ohio Bureau of Worker’s Compensation (Ohio BWC) is “unlikely” to publicly release sensitive portfolio company information, according to a legal expert on the private equity open records issue.
Carl Metzger, a partner in the Boston office of law firm Goodwin Procter, said that while official word will not come from Ohio BWC for another 24 to 48 hours, his understanding of developments at the insurance organisation is that its legal counsel is leaning toward not releasing a section of a report on the private equity programme that gives valuation information on portfolio companies.
The Ohio BWC’s reluctance to publicly disclose this level of information is based on its interpretation of Ohio’s trade-secret laws, Metzger said. In states such as California and Texas, portfolio company data has been legally defined as a trade secret, and therefore not subject to state open record disclosures.
The insurance group is awaiting final word on the matter from the Ohio attorney general’s office.
Last month, a scare went through the private equity industry when it was revealed that Ohio BWC would release a report on its private equity programme prepared by consulting group Ennis Knupp. The planned disclosure is in response to an open records request from local newspaper The Columbus Dispatch and other news organisations. In the wake of a well publicised fiduciary scandal at the Ohio BWC, local news organisations are swarming the insurance group in search of more bad investments.
The Ohio BWC report includes information on 68 private equity funds, including vehicles managed by The Carlyle Group, Castle Harlan, Fremont Partners, Quad C Advisors and HarbourVest Partners.
Ohio BWC plans to release the report on Friday, according to a spokesperson for the insurance group. He added that the report would likely be posted on the Ohio BWC web site.
If the report includes sections on initial and current valuations of underlying portfolio companies, it will be the first time a state agency has made publicly available that degree of detail from a private equity investment portfolio. Previously, public pensions and public endowments have provided fund-level performance information, but not data on individual portfolio companies.
Meztger is an advisor to the National Venture Capital Association, which is opposed to the disclosure of portfolio company data, as well as to several of the private equity firms who will be affected by the Ohio BWC disclosure.
Most of the firms affected by the Ohio FOIA request have sent letters to the insurance group opposing portfolio company disclosure. Some have voiced strong opposition to the release of any part of the Ennis Knupp report.