LGPS to launch PE transparency code

The Local Government Pension Scheme Board, which advises the UK consortium of 90 local authority pensions, is developing a transparency code and template for private equity managers.

The initiative, which asset managers would opt into, is an agreement requiring managers to automatically report cost and fee data to LGPS-member LPs through a standardized template.

The Code for listed equity managers was introduced this week.

The private equity code could take as long as two years, Liam Robson, an analyst at the LGPS, told pfm.

“It will take a lot longer to produce an equivalent template for private equity as managers are more diverse. The aims are consistency and comparability and so it may take a couple of years, looking at the Netherlands as an example,” said Robson.

The LPGS has £217 billion ($282 billion: €253 billion) in total assets under management, with an overall allocation of 3 percent to private equity, up from 1.9 percent in 2015.

Partners Group, Neuberger Berman Private Equity and BlackRock all manage private equity assets for the LGPS. A Partners Group spokeswoman confirmed the firm is aware of the plans, but declined to comment further. Neuberger Berman Private Equity and BlackRock did not respond to request for comment.

“The Investment Association helped with developing the listed equities template. As a voluntary initiative for managers, it can be developed progressively and evolve over time,” said Robson.

The move follows increased demand in the US for state pension funds to disclose costs paid to GPs. Several US states are considering following California’s lead in requiring all its public pension funds to disclose the pro rata share of fees they pay to fund managers.