Disclosure and transparency in private equity

Private equity needs to become more open. This review seeks to promote materially greater visibility of private equity, but without eroding its capacity to act as a positive agent of economic change and as a contributor to the UK economy through the concentration of significant cross-border private equity activity in London.

The importance of private equity has been recognised and supported by successive governments in the UK. But it has been inadequately explained, and its role and the ingredients in its success are not well understood.

This is partly the result of the understandable tendency of many in the industry, who chose not to be in the public eye of the listed sector, to say that “private means private” and to be attentive to confidentiality to the point of secretiveness.

It is also the result of very rapid recent growth in a highly competitive industry, which has left many of the main industry participants focussing on winning deals and implementing business strategies in the companies they acquire with little attention to the wider context. Some of this recent growth has been driven by exceptional credit conditions which are at least partly cyclical in nature.

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The Walker Working Group has been established to advise Sir David Walker on his review of transparency and disclosure in the private equity industry with a view to forming a voluntary code or set of guidelines.