Institutional Limited Partners Association Releases New Reporting Standards

Reporting Template

This is the first time the Reporting Template has been updated since its original release in 2016.

The structure of the template is unchanged, but it has been supplemented to increase the amount of data disclosed. The new Reporting Template seeks to provide information in a standardised format on the fees and expenses incurred by investors when investing in a fund. It has two main components – the capital account statement, and the schedule of fees and reimbursements received by the investment adviser and related persons with respect to the fund's portfolio companies/investments. It includes enhanced reporting on partnership expenses paid to third parties, and (separately) expenses allocated or paid to the sponsor and related persons. There is also now a supplemental schedule for fund of funds.

Modifications to the template are, generally speaking, no longer permitted. This is intended to help support more standardised reporting. Suggested guidance and supplemental resources have been released alongside the new Reporting Template and continue to be released.

Performance Template

The new Performance Template is the first of its kind in the industry. It is designed to standardise return calculation methodologies in private equity by "creating a framework for capturing performance metrics and corresponding contributions/distributions" to give investors more visibility into the cash flows and performance metrics. 

In response to industry feedback, there are two versions of the Performance Template depending on how sponsors calculate gross performance and call capital – one that uses the "Granular Methodology" for those sponsors who calculate gross performance at the fund-level based on fund-to-investor cash flows and itemise each capital call and one for the "Gross Up Methodology" for those sponsors who use fund-to-investment cash flows for calculating gross performance at the fund-level and/or do not itemise capital calls. Both versions show the same fund and portfolio-level performance metrics and cash flow data.

Modifications to the Performance Template are also restricted, so that investors can compare key performance metrics across funds. Again, suggested guidance and supplemental resources have also been released, and continue to be released, for the Performance Template. 

Sponsors who adopt the ILPA Reporting Template have until the beginning of Q1 next year to implement the new template for their new funds (i.e., funds commencing operations on or after 1 January 2026) and for funds still in their investment period during Q1 2026.

Sponsors who adopt the new Performance Template (which is for new funds, i.e., funds commencing operations on or after 1 January 2026) should begin capturing data from Q1 2026, with the first delivery of the Performance Template after the quarter ended on 31 March 2027. The "commencement of operations" should be in line with other financial reporting of the fund.

Existing funds still in their investment period in Q1 2026 (and whose sponsor adopts the ILPA Reporting Template) will therefore need to change how they report to investors (although they will not need to provide the Performance Template, since that is for new funds only). Sponsors may end up using both the 2016 ILPA Reporting Template and the new Reporting Template unless they adopt the new Reporting Template for all of their funds – there are mechanisms in the new Reporting Template to support older funds who wish to use it.

ILPA recommends that sponsors (particularly emerging and mid-market managers), investors and service providers start to engage now to make sure that they are ready for the implementation of the new templates. The changes to the Reporting Template and the new Performance Template should not come as too much of a surprise: ILPA consulted widely with the industry, and made changes to the draft versions of the templates to take into account feedback.

Whether or not the templates succeed in creating greater efficiencies for sponsors in reporting remains to be seen, as does the level of take up, but we expect investors will welcome the changes as they are increasingly focused on enhanced transparency from sponsors, in particular the way in which sponsors report to investors on their financial metrics.

Sponsors who adopt the Invest Europe Reporting Guidelines will note that these were previously consistent with the 2016 ILPA Reporting Template, and sponsors who used the Invest Europe Guidelines were also able to claim compliance with ILPA. Invest Europe may now decide to revise its Guidelines so that such equivalence can be maintained, but no announcements have yet been made in this regard.