The Private Equity Reporting Group (the “PERG”) has reviewed the private equity industry’s conformity with the Guidelines for Disclosure and Transparency in Private Equity (the “Guidelines”). The Guidelines, recommended by Sir David Walker in 2007, seek to increase transparency through enhanced reporting and disclosure by the largest UK portfolio companies and their private equity owners. The PERG was established in March 2008 to monitor the industry’s compliance with the Guidelines and make periodic recommendations to the British Private Equity and Venture Capital Association (the “BVCA”).

Key findings

• This review covers 61 portfolio companies (2019: 55) that fall within the scope of the Guidelines and the 51 firms (2019: 51) that back them (private equity firms and those operating in a private-equity like manner). The review took place over the period the COVID-19 pandemic swept across the world and affected portfolio companies’ operations. In recognition of this, and in line with the approach taken by regulators to extending reporting deadlines, all new portfolio companies in the population were given a first-year grace for the enhanced reporting requirements in their annual report.
• 93% of portfolio companies reviewed in the sample complied with the disclosure requirements in the annual report (2019: 100%). 60% prepared disclosures to at least a good standard which is a slight improvement on prior year (2019: 53%) and two companies produced excellent disclosures (2019: One).
• The consideration of the impact of COVID-19 did lead to improved disclosures covering the financial position and performance of companies, including detailed commentary on affected areas that was reflected throughout the annual report. 64% of portfolio companies also published a statement on their response to COVID-19. 70% of portfolio companies have published an annual report in a timely manner on their website, noting that some companies were granted extensions due to COVID-19 (2019: 80%). 68% of portfolio companies have published a mid-year update in a timely manner on their website (2019: 68%).
• 5% of portfolio companies have not complied with any of the three components of the Guidelines that apply to them (2019: 7%). These companies are backed by non-BVCA members. All BVCA members have published certain disclosures on their own websites to communicate information about themselves, their portfolio companies and their investors as required by the Guidelines. 87% of portfolio companies provided data, which is presented in aggregate in the EY performance report published alongside this report (2019: 89%).