LPs: Reporting standards a weak point in LatAm

Not all private equity investors in Latin America are satisfied with GPs’ level of adherence to industry valuation and reporting standards, according to a recent survey from Coller Capital and trade body LAVCA.

A significant minority of LPs in Latin America are not satisfied with their GPs’ ability to follow widely used reporting and valuation guidelines released by industry groups like the International Private Equity and Venture Capital Valuation board and the Institutional Limited Partners Association. 

The findings come from a study released by Coller Capital and LAVCA Wednesday which overall discovered LPs are generally satisfied with the terms, level of communication and personal alignment with LPs exhibited by Latin America GPs compared to their peers.  

However, roughly 25 percent of LPs cited Latin America GPs’ adherence to reporting and valuation standards, as well as their responsible investment disclosures, as lacking. Unless improvements are made, Latin America fundraising may suffer as a result. A large majority (71 percent) of LPs expect environmental, social and governance (ESG) considerations to play an increasing role in fund selection in Latin America over the next two to three years, according to the survey. 

Regardless, the larger picture shows increased LP interest in a growing Latin America economy. More than 85 percent of LPs expect their commitment pace to Latin America-focused private equity funds to increase or stay the same over the next 12 months, the survey found. Reporting from sister site Private Equity International has additional details on Latin America fundraising trends available HERE

Coller and LAVCA’s survey featured responses from 105 Latin American and international private equity investors. Respondents included corporate and public pensions, banks, government-owned organisations, insurance companies, funds of funds, family offices and other investors.