Sir Michael Rake, the chairman of the Guidelines Monitoring Group, set up to review private equity firms’ compliance with the Walker Guidelines has praised the private equity industry.
“I am very encouraged by the extent of the commitment which the private equity industry has shown to the increased levels of transparency and disclosure that have been requested by the Walker Guidelines,” he said.
However, there was some concern as around 50% of buyout firms which have agreed to comply with the code failed to fully meet the disclosure requirements.
Simon Walker, chief executive of the BVCA agreed but said private equity had responded well to inital failings: “While there have been instances where the GMG has not been satisfied with the initial actions undertaken by some portfolio companies in certain sectors, in every instance these mistakes have been acknowledged once identified by the GMG and corrective moves have been pledged or implemented already.
The 32 private equity firms and 54 portfolio companies which have come within the Walker structure, and hence the radar of the GMG, constitute well over 80% of funds under management, are broadly equivalent to the FTSE 350 and cover the vast bulk of private equity owned transactions by value. On any reasonable standard, they are a highly appropriate audience of whom to ask for more disclosure,” he said.
The guidelines themselves will be reviewed in a separate report due to be published in the Spring.
Source: Thomson Merger News