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The Private Equity Analyst: Limited Partners Summit Europe. _____________________________. Disclosure, Valuation Standards: Lessons from the United States. May 18, 2005 Presentation by Thomas A. Beaudoin. AGENDA. Background on Disclosure Debate Recent Legal Developments
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The Private Equity Analyst:Limited Partners Summit Europe _____________________________ Disclosure, Valuation Standards: Lessons from the United States May 18, 2005Presentation by Thomas A. Beaudoin
AGENDA • Background on Disclosure Debate • Recent Legal Developments • Effect on Current Fundraising Environment • What Next?
Background on Disclosure Debate • Who is disclosing? • Public Plans/Public University Endowments (Open Records Laws) • Publicly Traded Funds of Funds (Exchange Rules) • Non-US Investors (FOIA equivalent statutes) • Unlikely Suspects
Background on Disclosure Debate • Who is asking? • Press • Sellers of Information • Others • What could be disclosed? • Fund-Level Performance Data • Partnership Agreements/Terms • Portfolio Company Data
Recent Legal Developments • California: CFAC vs. CalPERS; Legislative Initiative • Texas: Attorney General Controversy; Texas Growth Fund Lawsuit; Legislative Initiative • Illinois: Legislative Initiative • Legislation Passed in Virginia, Colorado, Michigan, Massachusetts
Recent Legal Developments • UK Legislation • Limited Protection • Lack of Precedents • Requests Made to a Widening Net of LPs • Lack of Predictability: More to Come
Effect on Current Fundraising Environment • Fewer Public Pension Plans in Top-Tier VCs • Detailed Confidentiality Provisions and Side Letters • Define Scope and Use of Information • Permitted Disclosure • Prior Notification and Ability to Contest • Right to Withhold Information • Forced Withdrawal or Transfer Provisions
What Next? • Disclosure of “Stale” Portfolio Company Data • Interrelationship between Disclosure and Valuation • Harmonized Disclosure Standards/Formats • Slow Movement to More Regulated Industry