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AIC supports increased disclosure for all large private companies

The Association of Investment Companies has supported increased disclosure by large private companies and says private equity-owned companies should not be singled out.

In its response to the Walker Review, director general Daniel Godfrey says the AIC supports increased disclosure regardless of the ownership structure of the business.

He says: “We see no reason why companies owned by private equity funds should be singled out for special attention.

“The key criteria for determining whether additional transparency is desirable is the size of the public footprint of the business. Where there is a legitimate stakeholder interest perhaps due to the number of employees, importance to the national or local economy or high street presence then greater transparency and engagement becomes increasingly appropriate. The method of ownership is a secondary factor, if indeed it is relevant at all.”

The AIC also emphasised that higher levels of disclosure by private equity funds is achievable, citing the existing transparency provided by listed investment companies with private equity interests.

Godfrey says: “The listed private equity investment company sector represents a relatively small but significant part of the total UK private equity market and one which may well expand in the future.

“Listed investment companies with private equity holdings already offer high levels of transparency through regular public reporting which is a clear benefit to shareholders and other stakeholders interested in the activity of the fund. Results would tend to indicate that it has had no adverse impact on their investment process.”

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