ILPA releases fee template, seeks feedback

The LP trade body is asking how to account for co-investment fees and other costs as part of its quest to standardise fee reporting.

On Thursday, the Institutional Limited Partners Association released a heavily-anticipated fee reporting template that seeks to standardise how general partners share fee information with investors.

The template is designed to supplement ILPA’s existing quarterly reporting standards by adding new sections on GP compensation and items like clawback obligations.

The template, part of ILPA’s new “Fee Transparency Initiative”, itemises a wide range of costs including advisory fees, broken deal expenses, director fees, monitoring fees, organisational costs, placement fees and capital market fees. Fund managers are asked to calculate the fees since fund inception, on a trailing 12-month basis and on a quarterly basis.

ILPA is still soliciting feedback on a number of technical questions in the draft, which was put together by a consortium of 60 LPs, GPs, service providers and consultants. These include how to standardise costs charged to co-investors or other side investment vehicles and if the template should account for any deal fees retained by the GP when they exceed total management fees.

It remains to be seen what level of acceptance the template will find in the GP community. In conversations with pfm, chief financial officers have aired concerns over the template’s ability to define terms in a way that ensures reporting consistency across funds. Others have raised questions about how LPs will use the data, which fund managers fear will lead to backlash if used out of context.

ILPA is soliciting feedback on the template until 11 December 2015, with the aim of producing a final version by 29 January 2016.

This story was first published in Private Funds Management.