Institutional Limited Partners Association—Private Equity Principles—financial reporting and other fund disclosures
Institutional Limited Partners Association—Private Equity Principles—financial reporting and other fund disclosures

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Institutional Limited Partners Association—Private Equity Principles—financial reporting and other fund disclosures
  • Financial disclosures
  • Notifications and policy disclosures
  • Limited partner disclosures

This Practice Note provides an overview of best practice guidance relating to financial reporting and other disclosures made by private equity funds contained within the Private Equity Principles (Principles) issued by the Institutional Limited Partners Association (ILPA). This Practice Note should be read in conjunction with Practice Note: Institutional Limited Partners Association—Private Equity Principles.

Financial disclosures

ILPA notes in the Principles that at a minimum, the fund’s limited partners should be notified of any fees/expenses assessed either to the fund or to any of its portfolio companies, as outlined in the ILPA Reporting Templates for Fees, Expenses and Carried interest (2016). ILPA further notes that fees/expenses charged to individual limited partners and the fund as a whole and carried interest calculations should be disclosed regularly and consistently and subject to regular review by the fund’s limited partners advisory committee (LPAC) and certification by an independent auditor.

Fees and expenses

ILPA notes the following in the Principles in relation to the above:

  1. fund documentation should adequately detail the definition, calculation, assessment and reporting of any fee/expenses allocable to the fund or its portfolio companies that impact on the commitment of the fund’s limited partners to the fund and/or the net investment return

  2. the fund’s fee and expense policies should be appropriate, reasonable, arm’s length and fully disclosed to the fund’s investors

  3. all