ILPA publishes template to capture fees, expenses, carry payments

The Institutional Limited Partners Association is attempting to boost transparency with a reporting template that will capture fees, expenses and carried interest collected by the GP.

ILPA announced Friday the publication of its Fee Reporting Template, which is part of the trade group’s fee transparency initiative started in May 2015. ILPA has been working on the template since September and received feedback from more than 120 individuals and organizations, including nearly 50 LPs and 25 GPs.

Specifically, the template shows all money collected by a GP from LPs and portfolio companies, including fees, fund expenses, offsets that have been applied, carried interest amounts and income received through related parties or parallel vehicles to the fund. It’s meant to be a supplement to a fund’s standard financial disclosure.

ILPA expects GPs who choose to use the template to take up to a year to do so. The group recommends the template be used for future funds and “where feasible” reporting on current vintages. “The ILPA advises against requiring GPs to retroactively report the full breadth of the information within the template for older funds,” ILPA said in guidance published along with the template.

The template originally called for reporting on a trailing 12-months basis, to comply with disclosure requirements for those LPs with fiscal years other than Dec. 31. However, GPs preferred year-to-date reporting, which the template reflects.

“LPs have indicated that [trailing 12-month] reporting capability would be strongly preferred,” ILPA said. “As the industry advances towards the fully electronic exchange of standardized information, the ILPA recommends that GPs and the software community begin evaluating ways to adapt current processes and systems to allow for this adjusted reporting horizon.”

The new template was endorsed by LPs including the California state teachers and state workers pensions (CalPERS and CalSTRS), the Florida State Board of Administration and the Canada Pension Plan Investment Board. Twenty-five GPs endorsed the template, including Carlyle Group and TPG.

“ILPA’s new reporting standards, as illustrated by the fee reporting template, will provide our members with the clarity and consistency of information required to perform their duties, while giving GPs a more consistent roadmap for what limited partners need,” said Tanya Carmichael, ILPA’s chair and director, global funds at Ontario Teachers’ Pension Plan (OTPP).

As of January 28th, the following LP organizations have endorsed the Fee Reporting Template:

· AP2
· BBC Pension
· Bonanza Oil Company
· Canada Pension Plan Investment Board (CPPIB) CMPA
· Colorado PERA
· DC Retirement Board
· Florida SBA
· Guardian Life Insurance Company of America
· Kentucky Retirement System MetLife
· New York State Common Retirement Fund
· Ohio PERS
· Ohio SERS
· Ontario Teachers’ Pension Plan
· Oregon State Treasury
· Pennsylvania PSERS
· San Diego County Employees Retirement Association (SDCERA)
· South Carolina Retirement System Investment Commission
· Teacher Retirement System of Texas (TRS)

In addition, the following third parties have been instrumental to the development of the Template and related guidance and intend to support the adoption and implementation of the Template:

Cambridge Associates
Capital Analytics
CEM Benchmarking
Conifer Financial Services
TorreyCove Capital Partners
Upwelling Capital

ILPA Private Equity Principles (2011) and list of endorsing organizations (as of July 2015)
ILPA Reporting Guidelines (2011)
ILPA Capital Call and Distribution Notice Templates (2011)
AltExchange Data Standard and Definitions

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