BVCA forms working group on disclosure
1 March 2007
The BVCA - The British Private Equity and Venture Capital
Association - today 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.
In order to achieve this the BVCA will establish a high level
industry working group to produce a voluntary code addressing the
transparency of the industry and levels of disclosure. The working
group will recognise 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.
This has received support from across the industry.
Sir David Walker, Senior Advisor at Morgan Stanley International
(former Chairman of Morgan Stanley International, former Executive
Director Bank of England, and former Chairman of Securities and
Investments Board) will chair an independent industry working group
tasked with drawing up a voluntary code addressing the levels of
disclosure in the industry and how it should communicate with a
wide range of stakeholders.
The working group will consult widely. The process 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, said:
"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."
"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."
Sir David Walker, commenting on his appointment, said:
"I will be seeking input from a broad spectrum of the industry
and from all interested stakeholders in this important debate. We
expect to complete the process by the autumn."
This initiative has support from across the industry including
many of the largest Private Equity firms operating in the UK.
For further information please contact:
Mark Fox
BVCA
Director of Communications & Public Affairs
T: +44
7880
820 453
Peter Wilson-Smith
Quiller Consultants
T: +44 7979 526 152
Notes for Editors
It is envisaged the working party will produce its report by the
autumn
It will address the following:
- Appropriate levels of narrative and financial reporting
- Whether and to what extent the case is made for increasing the
level of reporting for PE-backed companies
- Timing of any increased reporting for PE-backed companies
- Clarity and consistency of practice with regard to valuation
methodology, its verification and disclosure to investors of
returns and fees
- The working party will recognise the very different types of
investment undertaken by the industry from small start up financing
to large buyouts
- The Financial Services Authority which regulates the industry
has recently concluded a thorough and comprehensive review of the
industry and in its paper, published in November 2006, stated that:
"We believe that the private equity market is an increasingly
important component of a dynamic and efficient capital market.
Private equity offers a compelling business model with significant
potential to enhance the efficiency of companies both in terms of
their operation and their financial structure."