Everybody was talking about it, but nothing much seemed to be happening. The transparency debate has been bubbling along ever since CalPERS got hearts racing by publishing performance data about its portfolio of private equity funds on its website. A lot of column space was devoted to private equity investor activism, and there was no shortage of LPs making bold if general observations about their take on general partner conduct. But as time wore on, it remained unclear just how much of an impact this activism was actually going to have. The transparency debate seemed to be running out of steam.
Recent events in the US have changed this. UTIMCO's lifting the veil on its 130-strong private equity fund portfolio has put the cat firmly back among the pigeons. Other US public institutions invested in the asset class are under pressure to follow suit as the country's constitutionally enshrined commitment to freedom of information is getting the better of nondisclosure terms written into limited partnership agreements, and general partners are beginning to sense that this may the biggest threat yet to their often secretive business practices of old.
These events have captured the industry's imagination, and PEI was intrigued as well, which is why much of this issue relates to them. The America section on page 11 charts the developments that led to UTIMCO's decisive step forward, and Asset Class on page 15 is an interview with the president and CIO of UTIMCO, Bob Boldt, where he explains why he and his team decided to embrace ?active disclosure?.
There is also the cover story, an in-depth look at private equity fund administration and reporting technology. This may seem a rather mundane topic for a cover story, but now that LP/GP communication is back on top of the industry's current agenda, both parties should find it interesting reading. Accepting that the best relationships are based on regular and clear dialogue so the quality and level of discourse between a limited and general partner is in no small part shaped by day to day information flow and that is determined by administration and, increasingly, sophisticated information management technology.
Philip BorelManaging Editor