ILPA backs PEIGG reporting guidelines

The Institutional Limited Partners Association put its stamp of approval on the recently completed private equity reporting guidelines, a blueprint of proposed standards in reporting performance that was drawn up by the Private Equity Industry Guidelines Group (PEIGG).

The association’s next step is to consolidate three separate sets of reporting and valuation standards into one all-encompassing global model.

We’ve got two sets of guidelines for valuations and one on reporting, so what we’re trying to do is to establish one set of global guidelines Arlett Tygesen, executive director, ILPA

ILPA, in the past, has backed separate valuation guidelines that have been established for the US and international markets. PEIGG authored the proposed US valuation model, while the BVCA (British Venture Capital Association), EVCA (European Venture Capital Association) and AFIC (Association Française des Investisseurs en Capital) worked together to pen the international set of valuation standards.

Now that ILPA has thrown its support behind the three models of valuation and reporting, the association now wants to see the several standards combined to form one set of standards that would be the model for private equity groups to use in the future. ILPA’s immediate next step is to try to wed the valuation standards of the US and international markets into one model.

“The ultimate goal is to see a convergence,” ILPA executive director Arlett Tygesen told PEO. “We’ve got two sets of guidelines for valuations and one on reporting, so what we’re trying to do is to establish one set of global guidelines.”

While creating the model is one thing, actually getting GPs to adhere to it is another, especially since there aren’t any regulations in place that would force their hands. However, it’s for that very reason that general partners have been amenable to the proposals.

“Most GPs are in favour of the guidelines,” Tygesen said.

She added that the hedge fund industry is starting to see more oversight from regulators, which is serving to motivate the private equity space to develop a set of standards, so as to not draw undue attention. “I think we can do our best to maintain the status quo and not invite regulation,” she noted.