Timing

Purpose

The GP’s investor reporting should be delivered on a consistent and timely basis to enable limited partners to evaluate interim performance, analyse risk exposures, etc. Reported information should therefore be delivered in a form agreed with the fund’s investors. It is typical for a GP to develop standardised reporting of information for their LPs at the outset so that over the life of the fund reporting is performed to a consistent format and timetable. However, there should always be the ability to enhance and modify the content of such reports over the life of the fund. This is particularly important where external legal, regulatory and stakeholder interactions lead to a change in the accepted norms for reporting to investors.

It is common for GPs to provide the quarterly information in one reporting package which includes both narrative and financial information. Where reports are presented separately, these Guidelines are designed to cover the requirements of both parts.

GPs will need to consider, and where appropriate agree with the LPs, what time periods their reports should cover. Current period (i.e., quarter or six months depending on the frequency of reporting) and data since inception are likely to be required, with either financial year to date or last twelve months’ data as an additional possible disclosure.

Exact timings, notification periods to investors and content of the reporting as well as audit requirements and applicable financial reporting frameworks (GAAP) are usually agreed within the fund formation documents. It is very rare that this changes over the life of a fund except where new accounting standards require such a change.

Requirements

At a minimum reporting should be in accordance with the fund formation documents. For funds holding direct investments, current market practice is for quarterly reports to be issued no later than 60 calendar days after the quarter end and annual accounts to be issued no later than 120 days after the year end for direct funds. For other types of vehicles making indirect investments, such as fund of funds, these time frames will inevitably be longer, typically an additional 30 to 60 days. The extent to which information requires an audit will be determined by the fund formation documents and local regulation.

Additional possible disclosures

It is common practice for GPs to provide contemporaneous updates to LPs on significant new investments, divestments/exits, changes in fair value, and economic or market events substantially affecting a portfolio company and/or the broader portfolio.

As further discussed in the Fund Information section, and subject to any contractual arrangements between the relevant parties, outside the ordinary course of business, GPs could also provide updates on any related-party transaction activity (e.g., fund-to-fund transfers of investments, annex or continuation funds, etc.) and major portfolio company events, e.g., IPOs or major acquisitions by the Portfolio Investment (e.g., bolt-ons).

Such reports should ideally be sent to LPs contemporaneously with any press release/publication.

ESG reporting should ideally be integrated into the annual/quarterly reporting cycle but does not necessarily need to be integrated into the same report. ESG disclosures and reporting can be done in a separate report following timelines set by regulators and agreed to by investors. For example, in the French market many companies are required by law to produce an annual integrated report that contains both financial and sustainability disclosures. Other European firms may have a separate ESG/Sustainability report and a separate Annual Report that contains all the required financial disclosures. Aligning the timing of these two reports is ideal as it enables the timely correlation of a firm’s relevant ESG measures to its business outlook and potential financial outcomes.

However, there is no requirement to combine the quarterly Investor Reporting Guidelines and the ESG reporting into one consolidated report. In practice, ESG reports are often issued separately from the quarterly Investor Reports (containing financial and valuation-related information) as frequency, timing and content differ significantly.