The Private Equity Reporting Group’s (PERG) 14th annual report on industry disclosure and transparency, published today, has found that all of the annual reports reviewed in the sample are compliant with the Sir David Walker guidelines for disclosure and transparency in private equity (Guidelines).
The PERG, which was established in 2008 and makes periodic recommendations to the BVCA, reviews compliance with the Guidelines for the largest private equity owned businesses in the UK.
The Guidelines encourage thorough and transparent reporting at a standard comparable to companies listed on the FTSE250. Portfolio companies that fall within the scope of the Guidelines, due to their size and significant UK presence, are expected to comply or provide an explanation as to why it was not possible to do so. In 2021, 64 UK portfolio companies fell within scope and, each year, a sample of around a third of these are reviewed for compliance with the requirements.
Further key highlights from this year’s report include:
- 67% of companies within scope of the guidelines prepared disclosures to at least a ‘good’ standard (2020: 60%, 2019: 53%), a notable increase given the larger proportion of new companies reviewed for the first time in the sample (2021: 64, 2020: 61). However, no companies produced ‘excellent’ disclosures this year (2020: Two).
- All BVCA members in scope, published disclosures on their own websites to communicate information about themselves, their portfolio companies and their investors.
- There has been an increase in improvement in disclosures on sustainability topics, compared to previous years, largely driven by the number of companies providing Streamlined Energy and Carbon Reporting in the UK and the importance of employees to a business. However, the quality of reporting on gender diversity still needs to be improved.
Alongside the 2021 report, the PERG has also announced a wholesale review – and subsequent refresh – of the Guidelines, to commence in early 2022, to ensure they remain fit for purpose.
This is to take into consideration current and forthcoming changes to the reporting landscape, ensuring the Guidelines not only reflect emerging industry trends but capture future disclosure requirements expected in the coming years.
The refresh is also to further reinforce the industry’s drive for transparency following increased stakeholder interest in private equity after a spate of high-profile transactions involving well-known UK businesses.
As an interim measure, the PERG has made recommendations on areas where portfolio companies could enhance the quality of reporting now. To assist, the good practice guide has been published alongside the report which highlights examples of good disclosures by private equity-backed companies.
Read the reports
Published 16 December 2021