20 November 2007

Walker guidelines on private equity transparency published

Sir David Walker’s final guidelines on transparency in the private equity industry have been published.  The code of conduct is aimed at improving the reputation of an industry whose secretive practices have come under fire. Private equity firms who manage or advise funds that control large UK companies will be affected by the new code.

They will need to publish an annual review to include enhanced disclosures, or provide regular website updates to show the same information. Firms should also use established guidelines for reporting to LPs and for the valuation of investments.

Those affected will need to provide data to the British Private Equity and Venture Capital Association (BVCA) for an enlarged economic impact study and should communicate promptly and effectively with employees.

The BVCA has set up a monitoring and review body to ensure compliance with the new code of conduct.

Trade unions have criticised private equity firms for endangering jobs and pension benefits at the companies they target for takeover.

TUC general secretary Brendan Barber said: “The Walker Review will not end the debate about private equity, as however thorough, it will be purely voluntary and only deals with one relatively narrow aspect.

 “While disclosure is vital, the wider implications of the growth of private equity will not be touched by Walker.”

© Graham Bishop