GPs meet tougher Walker Guidelines

UK private equity firms received high marks on their ability to meet transparency and disclosure recommendations set forth in the Walker Guidelines’, according to the Guidelines Monitoring Group’s (GMG) latest report.

Twenty five portfolio companies were reviewed and 16 percent were judged to have achieved an “excellent” level of disclosure, with the others rated as “good”. This is an improvement on last year, which saw just 7 percent achieve an “excellent” rating.

The improvement is especially welcome given the enhanced standards of disclosure the Guidelines now require. The GMG, which oversees compliance with the Guidelines, wanted enhanced disclosures for affected portfolio companies in line with additional requirements for quoted companies which came into effect last year. The main change affecting Walker portfolio companies is the requirement to give information on their business model, gender diversity and human rights matters.

But, despite the encouraging disclosure the GMG did note that there is still variation in the quality of the disclosures. For example, disclosures in relation to strategy, market environment and risks were much improved, but matters such as environmental, social and community issues were not as thorough.

“When considered in the context of our benchmark, the FTSE 350, and desire to monitor compliance against the better performers in this cohort, the results for 2014 are pleasing,” said in a statement Nick Land, the chairman of the GMG. “Looking to the year ahead, portfolio companies will need to amplify their efforts when complying with the latest edition of the Guidelines. These were revised due to the introduction of the strategic report in narrative reporting in the UK and will raise the bar for compliance.”