Walker calls for better private equity disclosure
Sir David Walker says reporting on buy-out performance is inadequate
The architect of the code of conduct for private equity firms has warned the
industry that it needs to improve the quality of the statistics and disclosures
of its performance.
Sir David Walker, writing in the FT, said the industry need to
establish a common methodology for reporting its performance as current
disclosures were inadequate.
‘It would be mistaken to expect comparability or reliability in attribution
analyses by individual private equity firms. This is because of the perverse
incentive to display performance in the most favourable light,’ Walker said.
Walker said that work was now underway to establish a standard methodology,
and that research by Ernst & Young would be used to set-up the new metric.
Walker also called on politicians and buy-out firms to back his code, which
he described as ‘pragmatic and workable’.