In the Private Equity Ecosystem, Standardized Reporting Is Becoming A Best Practice Between General Partner and Limited Partner Communities
By adopting ILPA templates, PE firms can promote transparency on fees, expenses and carried interest while saving their investors time and money.
16 January 2019
Alternative investments remain a critical element to investors’ long-term investment objectives. According to a recent Preqin survey, 84 percent of investors plan to increase their allocation to alternatives over the next five years. Given the anticipated volume increase, General Partners (GPs) and Limited Partners (LPs) are looking to not only streamline the reporting process, but also improve transparency around fees, expenses and carried interest.
Enter Institutional Limited Partners Association (ILPA) templates, which help standardize how GPs report to their LPs within the private equity space. ILPA is a global organization dedicated to advancing the interests of LPs and their beneficiaries through education, research, and events. ILPA templates encourage robust standards for fee and expense reporting as well as compliance disclosures among investors, fund managers and their advisors. LPs are continuing to push for standardization to make better informed decisions more quickly, and those GPs that can provide standardization could have a competitive advantage.
Intralinks strives to promote efficiency in the alternative investment community, and ILPA templates represent a useful resource in achieving that objective. Along with several other financial organizations, Intralinks has endorsed the template for reporting standardization.
“When ILPA published the template in 2016, our goal was to create a resource that allowed GPs and LPs to report and gather critical information in a standardized manner so that the industry could more effectively measure and compare performance,” said ILPA Managing Director of Industry Affairs Jennifer Choi recently. “Those organizations who are utilizing the template have not only made their reporting process easier but have also contributed to a stronger global private equity ecosystem. We applaud their efforts and commitment.”
In a recent INsights feature about upcoming trends in the Alts community over the next 12 months, Director of Strategy and Product Marketing Meghan McAlpine predicts that GPs will prioritize transparency and reporting standardization in 2019, potentially by implementing ILPA templates. That prediction is already coming to fruition: the total number of organizations that have committed to standardizing disclosure to maximize efficiency in reporting now exceeds 170 with an estimated 300 general partners completing the template when requested.
As Intralinks is committed to streamlining the reporting and investing processes for GPs and LPs, we will continue to develop and implement valuable resources like the ILPA templates that will encourage more fund managers to increase granularity when reporting on investments. These initiatives save time and resources for GPs and LPs as they raise capital and report on fund performance more efficiently – not to mention providing peace of mind that they are doing so in total compliance.
Aiko Suyemoto is Intralinks’ Senior Associate on the Product Marketing team, supporting the M&A, Banking and Securities and Alternative Investments lines of business. She also has experience in corporate communications and business consulting.