The Institutional Limited Partners Association (ILPA), in collaboration with industry stakeholders, has introduced new quarterly reporting standards. These updated templates aim to enhance transparency, standardization, and comparability in private equity reporting and compliance. Greg Jania, Global Co-Head of Private Equity at APG, discusses the significance of these new standards.
In early 2024, ILPA launched the Quarterly Reporting Standards Initiative (QRSI) to advance its quarterly reporting framework. This initiative garnered substantial interest, with over 300 organizations—including Limited Partners (LPs), General Partners (GPs), fund administrators, consultants, and other key industry participants—joining the effort. After a year of discussions, drafting, and validation, the ILPA Reporting Template and ILPA Performance Template were released in late January, addressing both fees and expenses as well as performance metrics.
Clarity and consistency in reporting
According to ILPA, these standards will provide LPs with greater transparency in a consistent format, reducing the volume of ad hoc requests GPs receive for critical information. Additionally, the new templates offer fund administrators, custodians, and other technology service providers a structured framework to integrate into their systems, facilitating automation and enabling more efficient data analysis. Jania: “Transparency improves trust between LPs and GPs. Standardized templates turn chaos into clarity, making complex information accessible to all.”
Jania emphasizes that these templates represent the most comprehensive reporting standards ever developed for the industry, thanks to the collaborative input of GPs, LPs, and service providers. From a private equity investor’s perspective, the benefits are clear and multifaceted. “A standardized report is like a well-structured story; it allows the reader to understand the plot. Also, standardized reporting allows APG to deliver more data, information, and analysis on our private equity portfolio more efficiently to clients. This helps the clients achieve their goals of understanding their portfolio better and reducing costs.”
Strong initial industry response
With the templates now published, the focus shifts to industry-wide adoption. “The fact that all groups were represented in the development of the templates should speed acceptance and adoption globally. APG will have some influence on general partner adoption of the templates given our position as a top 20 global private equity investor, but our influence will be magnified by the other limited partners we can encourage to endorse the templates as well.”
Initial industry response has been promising. Nearly 70% of participants in the QRSI comment period indicated plans to adopt the updated ILPA Reporting Template, while approximately 52% expressed intent to implement the new ILPA Performance Template. However, full adoption remains a challenge, particularly among smaller, niche managers. Jania notes: “Our biggest challenge in gaining full adoption will be with smaller, niche managers that are turning away capital given their strong historical performance. Hopefully, these managers will see the templates as a way to solidify their performance lead in the industry given the increased transparency the templates provide.”
As the private equity sector continues to evolve, the success of these standards will depend on industry-wide commitment to transparency and efficiency.