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The Private Equity Reporting Group (PERG) has published its annual report on the private equity industry's compliance with the Walker Guidelines for Disclosure and Transparency in Private Equity. It has also published a Good Practice Reporting by Portfolio Companies Guide and a Report on the performance of portfolio companies.
The Walker Guidelines aim to improve disclosure and transparency in the PE industry and apply to the largest portfolio companies (which meet certain size and employment thresholds) and the PE firms behind them. Portfolio companies are expected to make certain disclosures in their annual reports including around ownership, board composition and other matters concerning the business. The Guidelines were updated last year (read more on our blog post here) and the revised guidelines will be in full effect from 2026.
This year 98 portfolio companies, backed by 65 private equity (or similar) firms, fell within the scope of the Guidelines. The reports of around a third of those companies were then reviewed for compliance. Key findings in this year's annual report include:
- within the sample of 27 companies reviewed in detail, 100% were ultimately compliant – either through their annual report or an addendum – but only 56% reached a good standard of disclosure, which PERG describes as disappointing;
- 74% included a Statement of Compliance in their annual report (2024: 78%). This statement is regarded by the PERG as a basic requirement and the private-market equivalent of the "fair, balanced and understandable" test under the UK Corporate Governance Code; and
- 11 portfolio companies failed to comply with any of the requirements, despite repeated engagement by the PERG.
Environmental reporting and social, community and human-rights were the areas of greatest progress, while disclosures on strategy, gender diversity and financial KPIs were identified as requiring improvement.
The PERG says that private equity firms should spend time familiarising themselves and their portfolio companies with the requirements of the Guidelines, and knowledge of the Guidelines' requirements should be embedded in the annual reporting cycle.
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