The British Private Equity and Venture Capital Association (BVCA) is to 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.

The British Private Equity and Venture Capital Association (BVCA) is to 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.

A working group will be established by the BVCA to produce a voluntary code addressing the transparency of the industry and levels of disclosure. The working group will recognise the different types of investment and issues relating to different segments of the industry from small start-up financing to large buy-outs. It will also take account of the size of the portfolio companies concerned.

A report is expected in the autumn. Areas to be looked at include:

• 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; and
• the working party will recognise the very different types of investment undertaken by the industry from small start-up financing to large buy-outs.

The working group is to 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, notes that the ‘initiative reflects the coming of age of the private equity industry as a mainstream asset class in the UK’.