In its first report on the UK private equity industry’s conformity with the Walker Guidelines, the Guidelines Monitoring Group (GMG) found that there has been a high level of support and commitment to the directives from the industry.
Half of the portfolio companies reviewed strictly met all the criteria set out in the Guidelines and the remainder have participated on a voluntary basis. A substantial majority of portfolio companies reviewed are described as having made “good or acceptable” disclosures with only a limited number of exceptions.
Although positive in its initial review, the Group does state that while the efforts of the industry are encouraging, improvement in some areas is “both possible and necessary”.
BVCA chief executive Simon Walker said: “While there have been some instances where the GMG has not been satisfied with the initial actions undertaken by some portfolio companies in certain sectors, in every instance these mistakes have been acknowledged once identified by the GMG and corrective moves have been pledged or implemented already.”
The Guidelines require additional disclosure and communication by private equity firms where a portfolio company has more than 1,000 employees, generates more than 50% of their revenues in the UK and has an enterprise value of more than £500m.
The Group is to publish recommendations for changes to be implemented by the BVCA in spring of this year.