Industry meets Walker Guidelines challenge

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.

Thirty portfolio companies were reviewed and 29 met the required threshold – a much higher proportion than in previous years.

The guidelines use the reporting standard of FTSE 350 companies (the largest 350 companies listed on the London Stock Exchange) as a benchmark for private equity firms to meet.

Nick Land, chairman of the GMG responsible for monitoring compliance with the guidelines, praised the latest report, noting this was the first time the group reviewed the websites and/or annual reports of all private equity firms studied. In that effort, the group searched for details on GPs’ investment approaches, UK portfolio companies and senior leadership.

The latest report marks a significant turnaround for the UK private equity industry’s ability to meet the guidelines. Earlier this year PE Manager wrote that some firms were struggling to meet the guidelines after thresholds were lowered to bring more firms within their scope. For example, companies acquired for £350 million ($530 million; €405 million), down from £500 million, became subject to the guidelines.

Casting a wider net resulted in lesser quality disclosure reports, said one source familiar with the matter at the time. He added it was “obvious the level of disclosure is not as good as some of those who have been doing it for four years”.