Guidelines monitoring group update report on walker guidelines

The Guidelines Monitoring Group established to review the private equity industry’s conformity with the Walker Guidelines has published an update report recommending to the BVCA that the test in the Guidelines which defines a portfolio company be amended.

Section V.3 currently defines a portfolio company as a UK company acquired by one or more private equity firms in a public to private transaction in excess of £300m or a secondary or other non-market transaction in excess of £500m, generates more than 50% of revenues in the UK and has 1,000 or more full-time UK employees.

The Guidelines Monitoring Group has recommended that a portfolio company be defined as one which meets the value thresholds and generates more than 50% of revenue in the UK or has 1,000 or more full-time employees. The BVCA has accepted this recommendation and will be implementing the change in the next round of reporting. The Group is also considering, in consultation with the private equity industry, whether the £500m threshold should be lowered and expects this consultation to be completed by summer 2009.

Simon Walker, Chief Executive of the British Private Equity and Venture Capital Association, said:

“Furthering the disclosure regime for private equity is necessary, keeps pace with changing market circumstances since the initial publication of the Guidelines and demonstrates the industry’s commitment to a robust set of transparency rules. The evolution of the Guidelines is proof of a working system of independent regulation, which is the most efficient and appropriate method to ensure greater transparency without burdening businesses or stifling the industry’s capacity to help Britain invest out of the recession.”

You can read the update report here.