Private Equity’s Other Transparency Problem

这个月米,在一个非现场会议onterey Beach hotel, the California Public Employees’ Retirement System will weigh the future of its private equity portfolio.

The program has been a thorn in the investment office’s side for two years now. CIO Ted Eliopoulos has warned that it may be necessary to scale back CalPERS’s private equity allocation if a solution cannot be found.

问题不是SubPar表演：在基金的6月投资委员会会议，Eliopoulos将资产课作为基金最佳回报源之一，否则较为黯淡的环境。问题是透明度 - 或者，非常大的聚光灯卡波斯在其私募股权计划中提高了透明度，因此非常大的聚光点心。

“The particular public nature and fishbowl of CalPERS may have reached a tipping point for us in private equity,” Eliopoulos said.

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Improving transparencywithin private equity investing has been a focus of lawmakers and investors like CalPERS for several years, as limited partners have sought better alignment of interests with these firms and regulators have worked to protect the retirees and other beneficiaries ultimately on the hook for the investments.

Under the leadership of former chair Mary Jo White and former enforcement director Andrew Ceresney, the U.S. Securities and Exchange Commission made an example out of a number of the industry’s biggest players, including fining Blackstone Group and KKR & Co. in late 2015 a combined $69 million for charges related to improper fee disclosures. Meanwhile, states including Illinois and Washington drafted legislation to strengthen reporting requirements on alternatives for state and local pension funds.

With the law firmly on the side of transparency, investors and, to a lesser extent, private equity firms rapidly adopted fee reporting templates like the one released by the Institutional Limited Partners Association in early 2016. In the year and a half of its existence, ILPA’s version has been publicly endorsed by more than 100 organizations, Blackstone and KKR among them.

Despite the progress that’s been made on the transparency front, industry experts say there’s still plenty of work to be done — even as the investors that had crusaded for transparency come to terms with the new challenges that have accompanied it.

为其部分持续收费，最近将注意力转向私募股权公司雇用的信贷条目，以促进返回的内部返回率。但是，如果白人和CERESNEY的继承者在秒钟克莱顿和执法共同董事斯蒂芬·阿维亚岛和史蒂文·佩妮斯 - 将继续降低规范仍然相当不透明的私募股权行业的道路，这是未知的。

这个月, a small number of limited partners — CalPERS among them — will sit down with the new SEC chair in a meeting organized by ILPA to discuss private equity regulation under the new regime. Still, the regulatory future remains unclear — and with increasing amounts of cash flooding into an asset class that is already bursting at the seams, the balance of power may be quietly shifting back to the general partners.

“Given the hot fundraising market of the last few years, GPs have been able to work with a smaller number of prospective LPs to raise capital and have had more power to push back on some marginal requests,” says Tom Cawkwell, head of private markets at alternatives consulting firm Albourne Partners.

到目前为止，他的公司在获得“严重前瞻性投资者”等相关数据的访问中没有看到任何“有意义的减少”，因为“严肃的潜在投资者”，Cawkwell说。“GPS为他们所取得的成就感到自豪，并且潜在的投资运营数据可以非常有用，例如，尽管存在负面的部门趋势或货币运动，但是在投资组合公司的GP如何在投资组合公司的有意义和可复制的改进。”

但是，虽然GPS可能很乐意向投资者展示他们的底层数据，但这意愿揭示投资信息并不一定向公众延伸。Richard Carson坐落在剑桥员工私人投资高级总监，表示投资伙伴关系和透明度之间存在巨大差异，以互联网接入的任何人提供专有的投资数据或提出信息法案的能力要求。

“The public disclosure of information — that for sure can be an issue that could potentially keep a GP from admitting certain LPs as investors,” he says.

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这种透明度水平— typically found only at public defined-benefit funds subject to disclosure laws — can be detrimental to LPs, who may find themselves locked out of attractive investment opportunities.

And other drawbacks have come with more transparency. At CalPERS’s investment committee meetingin June，Eliopoulos表示关切的是，基金私募股权投资的聚光灯可能会减少其作为投资者竞争的能力。

CalPERS has been, in Eliopoulos’ words, an “industry leader in how we report private equity returns, fees, and expenses . . . in working with our peers and importantly the ILPA to work for standardization and make consistent fee and expense disclosure globally.”

Publicly reporting private equity fees and expenses has come with an unfortunate side effect, however: making the public aware of exactly how much CalPERS is paying in private equity fees and expenses.

Eliopoulos表示，从过去两年中，从媒体和计划受益者那里批评的批评并不仅担任了对基金的投资和运营人员的有害分心，而且迫切地损坏了CALPERS作为私募股权LP的声誉。

“Part of the price of our value of transparency and our role as a public agency is to take all the good and bad that comes with transparency, all the good and bad that comes with public comment and public attention,” he said. “But this sustained and repetitive attention on our staff and our private equity strategy is taking a toll on both our staff and our competitiveness in the marketplace.”

加州的其他国家养老金，加州州立教师退休系统，同样警告了可能带来太多透明度的陷阱。去年，当国家立法机构试图通过替代投资时要求严格披露的条例草案 - 包括在投资组合公司水平的释放专有基金信息 - CALSTRS是抗议拟议要求的资金之一，争论私募股权公司会争辩no longer wish to partner with California’s public pensions. The resulting law, which went into effect this year, was significantly watered down to accommodate these concerns.

“We feel the impact of transparency in our relative competitive position with other investors when it comes to potentially lucrative partnerships, but we understand the need for this transparency with a state-supported entity like CalSTRS,” CIO Christopher Ailman said in a statement provided to Institutional Investor. “In the larger scheme of things, this is just one more condition of working with a public pension investor and we’ve encountered a good deal of cooperative spirit from our general partners.”

Cawkwell - 在2007年加入Albourne之前在Calstrs管理私募股权投资组合 - 同样注意到，在他们的资金中有“GP透明度良好的GP透明度。”在Cambridge Associates，Carson表示，广泛采用GPS中更详细的报告实践的主要障碍并不情愿地披露信息，而只是缺乏较小公司的资源。然而，最终，他表示，在长期以来，GPS将更有效率，以适应他们的报告流程，因为大型复杂的投资者只是成为“更深层次的”信息的哀悼 - 只能改善LPS与LPS之间的投资伙伴关系的信息GPS，他指出。

“我们在制定报告结构方面承担了一个领导地位，这些结构比在行业中以前比以往任何时候都更有开放，同时保护我们作为私募股权投资者的利益，”艾尔曼说。“毕竟，我们在这个空间中最大限度地提高了基金的回归潜力，以获得我们的会员教育者及其受益人的利益。”