BVCA Seeks To Boost Private Equity Transparency

by Robin Pilgrim, LawAndTax-News.com, London

05 March 2007

Responding to public and governmental concern regarding the increasing role played by the private equity industry in the UK's businesses, the British Private Equity and Venture Capital Association last week announced that it will form a working group under the Chairmanship of Sir David Walker, to examine ways in which levels of disclosure in companies backed by the UK private equity industry could be improved.

The high level industry working group will work towards producing a voluntary code addressing the transparency of the industry and levels of disclosure.

The working group will take account of the very different types of investment and issues relating to different segments of the industry, from small start-up financing to large buyouts. It will also take account of the size of the portfolio companies concerned.

Sir David is Senior Advisor at Morgan Stanley International, and was formerly Chairman of Morgan Stanley International, Executive Director of the Bank of England, and Chairman of the Securities and Investments Board.

The working group will consult widely. It will invite representations from within the private equity industry, with interested parties and among other financial institutions, pension funds and the investment community, and more broadly with portfolio companies, trade unions and employer representatives.

Rod Selkirk, Chairman of the BVCA, announced that:

“This initiative reflects the coming of age of the private equity industry as a mainstream asset class in the UK. We recognise that the industry’s success has led to growing and legitimate interest in its activities.”

He continued:

“We plan to build on our existing high-standards of transparency and openness to our investors by increasing the level of disclosure to a wider group of stakeholders.”

“This working group will be fully attentive to the need to avoid any additional reporting burdens on the smaller companies backed by private equity and venture capital.”

Commenting on the initiative last week, Economic Secretary to the Treasury Ed Balls stated:

"I welcome today's announcement from the BVCA and with it the commitment to increase transparency and disclosure. Private equity is an important part of the UK financial services sector and can play an important wider economic role creating jobs and developing companies."

"I'm pleased Sir David Walker will be working with all stakeholders to address the levels of disclosure in the industry. The Government will be watching progress very closely."

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