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Cost transparency and investor reporting

The Cost Transparency Initiative (CTI) was launched in November 2018 by the Pensions and Lifetime Savings Association (PLSA), the Investment Association and LGPS Scheme Advisory Board as the successor to the Institutional Disclosure Working Group (see below). The CTI works on implementing, promoting and encouraging the use of new cost transparency templates across the pensions and investment industries. The BVCA was part of the IDWG that prepared these templates and will stay involved in the CTI’s work on private equity.

The templates have been published on the PLSA’s website and further detail is included in the helpful links section. The BVCA created a working group of GPs and LPs to prepare the private equity template. This was later updated to cover private markets as it worked well for private debt funds and further fields were included for real estate funds. The CTI is working on including fields on the template to cover the “look through” costs for Fund of Funds.

Investors, typically pension funds and LGPS, send requests to PE/VC firms complete the CTI templates for their funds. This is a UK industry-wide initiative and the DWP and regulators are also monitoring the uptake of the CTI templates. They do not presently propose to mandate the templates but may do so in the future.

The BVCA has been speaking to members regularly about the work of the CTI and publicising the private equity template. We understand that many firms with LGPS investors have been asked to complete and are completing the templates. Given the international investor base of our members – our data shows that less than c.20% of funds are raised from UK investors – the existing fee template promoted by ILPA a few years ago continues to be used widely. Other firms will have bespoke reporting requirements from their investor base and may also utilise Invest Europe’s Investor Reporting Guidelines. To aid comparability, we reconciled the ILPA and CTI templates as they both highlight fees and costs, albeit in different formats. Further detail is included in the Helpful Links section below.

The work on cost transparency in the UK stemmed from the FCA’s review into the asset management industry in 2016. As an output of this, the FCA set up an Institutional Disclosure Working Group (IDWG) in 2017 to encourage standardised disclosure of costs and charges in asset management. The IDWG’s work concluded in June 2018 and it issued a set of recommendations that included a series of templates – including a private equity template - for collecting information on costs and charges for different product types. In its final report the IDWG stated: “The Private Equity community, in producing this template in the UK, has gone a very long way to address concerns around the opacity of private equity and offset negative opinions individuals might have about the industry.”

The original IDWG report noted that the IDWG had agreed early on that firms that complete the ILPA fee template do not need to also complete the IDWG Private Equity template (as it included the same items and many private equity firms with operations in the UK already complete the ILPA template and have programmed their systems for this and should not have to produce the information twice). However, investors are still able to asked managers to complete the CTI template. In the FAQ on the CTI website, the CTI notes: Investors may wish to request data in the CTI format, particularly because the CTI Private Markets Sub-template uses terminology that is more familiar in the UK (and Europe) and follows the level of granularity included in the CTI Main Account Template. The CTI Private Markets Sub-template also has the advantage that it is based on the Invest Europe Investor Reporting Guidelines and this will aid consistency in reporting to investors in private equity funds. The CTI provides a?mapping?the two templates to help users identify the relevant line items. We hope that the mapping exercise can reduce the amount of duplicative reporting requests.
Helpful links


Further information


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