ILPA Marks One-Year Anniversary of Private Equity Principles

TORONTO, Sept. 27 /PRNewswire/ -- The Institutional Limited Partners Association, ("ILPA"), a not-for-profit organization committed to serving institutional investors of private equity, marked the one-year anniversary of the ILPA Private Equity Principles by announcing the Principles have received formal endorsement by 135 organizations globally. This endorsement comes from public and corporate pension funds, sovereign wealth funds, endowments, foundations, family offices and a variety of private equity investment firms and advisory firms.

The ILPA Private Equity Principles outline best practices with respect to establishing strong governance, appropriate transparency and the alignment of interests between LPs and GPs.  Over the last several months,  the ILPA  surveyed participants in the private equity industry, including both Limited Partners ("LPs") and General Partners ("GPs"),  and  found that most LPs use the Principles as a framework to help assess GPs and believe that incorporating the Principles during discussions with GPs will help align the interests between the two parties.  Additionally, a majority of responding GPs believe the Principles will enhance GP/LP relations and provide long term benefits to the private equity asset class.

Over the past year, thought-leaders from the GP and LP community have contributed ideas to evolve the Principles beyond their current state.  The Principles were one of the topics of discussion between heads of various institutional investors and private equity firms at an ILPA industry roundtable held in March.

"The Principles have helped foster constructive conversations between LPs and GPs globally," said Joncarlo Mark, Chairman of the ILPA.  "Real progress is being made as both sides work toward implementing new ways to improve communication between investors and ultimately strengthen the industry for the long term."

As an example of this collaborative approach, the ILPA is set to introduce the first part of a new set of financial reporting standards in November, which are designed to improve uniformity and transparency in financial information provided to private equity investors.  ILPA worked with a number of GPs to develop the concepts and content of these documents.  The initial roll out will offer new templates for capital calls, distribution notices and quarterly reporting of portfolio company financial information that will help create efficiencies and reduce expenses in administering and monitoring private equity investments.  The ultimate goal of the new reporting package is to create consistency, accuracy and expediency in partnership financial reporting, performance attribution and overall partnership activities.

"The ILPA Principles have already been a tremendous success,"  said John B. Breen, Treasurer of ILPA's Executive Committee and Vice President, Private Investments, Head of Funds & Secondaries, Canada Pension Plan Investment Board.  "Most GPs have embraced the governance and reporting Principles and discussion on all new funds have reflected the spirit of the document. On many occasions, LPs and GPs have used the framework amongst themselves to favorably resolve issues that arose through the financial crisis."

The ILPA Principles are one facet of the work undertaken by ILPA as it highlights the value that comes with having direct accountability from private ownership of a business, not only to the investment industry but to the ultimate beneficiaries of this value creation – the pensioners, charities, educational foundations, employees and companies. Along with promoting industry best practices,   ILPA addresses key issues that impact private equity, including regulatory reform, risk management and the amount of capital circulating in the industry.  The ILPA's education platform which includes executive level course curricula enables private equity professionals to stay abreast of key issues impacting the market.  The ILPA hosts networking events throughout the year to allow its members the opportunity to connect with their fellow LPs, and it also hosts an annual meeting between GPs and LPs.

About the ILPA:

The Institutional Limited Partners Association is a not-for-profit association committed to serving limited partners investors in the global private equity industry by facilitating value-added communication, enhancing education in the asset class and promoting research and standards in the private equity industry. ILPA has over 240 institutional member organizations that collectively manage approximately $1 trillion of private equity assets. For a copy of the ILPA Private Equity Principles and a list of endorsing organizations, please visit www.ilpa.org or contact Kathy Jeramaz-Larson.

SOURCE Institutional Limited Partners Association