NEW YORK, March 13 /CNW/ - Responding to the continued need for more
consistency and transparency in private equity valuations and taking into
account Statement No. 157, Fair Value Measurements, issued by the Financial
Accounting Standards Board in September of 2006, the Private Equity Industry
Guidelines Group has updated its U.S. Private Equity Valuation Guidelines. The
Updated Guidelines assist private equity participants in complying with U.S.
Generally Accepted Accounting Principles which require fair value reporting.
The Updated Guidelines along with a Frequently Asked Question document may be
found at www.peigg.org.
"The release of the Update Guidelines represents an important step in the
continued evolution of the private equity industry and they will help managers
value investments in a consistent and transparent manner," said PEIGG member
Stephen Holmes of InterWest Partners, a diversified venture capital firm that
invests in information technology and life science companies.
The Guidelines are designed to promote best practices and to improve the
consistency and relevancy of valuation information reported to investors--an
objective that is of increasing importance to the private equity industry as a
whole. "Private Equity Investments by their nature are difficult to monitor,"
said PEIGG member Kevin Delbridge of HarbourVest, one of the nation's leading
private equity fund of fund managers. "To evaluate manager performance on an
interim basis, to make manager selections and to make asset allocation
decisions, we need results reported on a common basis. Fair Value as outlined
in the Guidelines, provides that consistent basis."
The issuance of FASB Statement No. 157 has again highlighted the
importance of comparable valuation data. "Private Equity investors, that
prepare financial statements in accordance with U.S. GAAP, must report and
record their investments at fair value," said PEIGG member David Larsen of
Duff & Phelps, a leading independent financial advisory firm that specializes
in portfolio investment valuation for private equity firms and hedge funds.
"Therefore, they need fair value information from their managers. In addition,
most private equity partnership agreements require financial statements be
prepared in accordance with GAAP, which requires fair value. The Guidelines
are a great tool for the private equity community enabling managers to be
compliant with Statement No. 157 while taking into account nuances in the
private equity industry."
The Updated Guidelines are conceptually in harmony with the International
Private Equity and Venture Capital Valuation Guidelines issued in late 2005.
PEIGG believes that managers who follow the Guidelines will be compliant with
The Private Equity Industry Guidelines Group was formed in February 2002,
and is comprised of a volunteer group of industry-wide representatives who
have come together to debate and establish a set of reporting guidelines for
the industry. Its mission is to promote increased reporting consistency and
transparency while at the same time improving operating efficiency in the
transfer of information among market participants by establishing a set of
standard Guidelines for the content, formatting and delivery of information.
The Group is believed to be the first broad-based alliance, comprised of
general partners, limited partners and service providers participating in both
the venture and buyout segments of the private equity industry in the U.S. and
overseas. For more information visit www.peigg.org.
For further information:
For further information: InterWest Partners Stephen Holmes, 650-854-8585
or Duff & Phelps, LLC David L. Larsen, 415-693-5330