Profile: PEIGG –

Principal Contact: Angela Dailey at (714) 921-8449 or No Web or mailing address.

Regulatory Authority: None. It’s an ad hoc committee.

Guidelines: No materials available at present.

Charter: To create standards for reporting, valuation, performance reporting and fund financial statements.

Participants: The University of California, State Comptroller of New York, NIB Private Equity, CalSTRS, JP Morgan Partners, General Motors Investment Management Corporation, Bank of America, HarbourVest Partners, Hamilton Lane Advisors, and Grove Street, CVC Capital Partners, Texas Pacific Group, Thoma Cressey Equity Partners, Castle Harlan, and the Blackstone Group, InterWest Partners, New Enterprise Associates and Financial Technologies Inc.


In January 2002, four representatives from the private equity industry-JPMorgan Partners, Trident Capital, Bank of America Capital, and NIB Private Equity-joined together to create a “standards board” for the private equity industry. They issued a press release on their plans to create standards for the formatting and content of private equity data exchanged by general and limited partners. It was clear that the impetus for the effort came from LPs and not from GPs.

Over the course of the summer and fall of 2002 that group changed in many ways. Initially called the Private Equity Investment Standards Board, the group changed its name to the Private Equity Industry Guidelines Group. A second press release was issued last December from the group, by then totaling 18 individuals from several important private equity constituencies (see box above).

While the self-described authority of the group had been reduced, its scope had expanded from data exchange to the development of a core set of five recommendations, including reporting, valuation, public disclosure (subsequently removed), performance reporting and fund financial statements.

Not many people saw the release and even fewer people who were interviewed for this story knew how to contact the group’s members. Try calling the NVCA, for example and you’re not likely to receive much hard information about the group. When VCJ asked one NVCA official for information, the official said he was aware that “there is a group working on something” to do with standards for how venture capitalists report valuation of portfolio companies to their limited partners but that the official had been asked “not to comment on the group’s efforts.” Not the sort of ringing endorsement for fiscal transparency one might expect given the times.

Unlike the previous guidelines-making effort in 1989, the goals of PEIGG extend beyond the hyper-sensitive topic of valuation. The once rather harmless “exchange of data between GPs and LPs” has expanded to include data such as burn rates, product development status, management changes, earnings and a full list similar to that found in the guidelines of the BVCA. Reporting, which originally sounded like a description of the margins and formatting of information, has expanded to include a specific calculation formula for IRR and attendant information, such as a breakdown of returns by geography, supervising partner, strategy and stage. And data formatting has morphed into a something akin to the description for the presentation of data as developed by AIMR’s GIPS/PPS standard.

Three contact members were identified in the December release: Steven Holmes of Interwest Partners, Bill Franklin of The Bank of America and Kevin Delbridge of HarbourVest Partners. Four subcommittees were formed from among the representative companies, each tasked with developing draft proposals on one topic.

Spokespeople for the group make one thing abundantly clear: PEIGG intends to expose everyone and his brother to interim stages of development of its recommendations, in the style of recommended practices development by the FASB or NASD. It’s a process in which a draft regulation is created and then submitted to ever larger groups before a final public exposure and comment period. While all of this work is going on behind the scenes, a representative of PEIGG emphatically stresses that issues such as “valuation will always be based on the judgment of the individual firm. That is, there is no attempt in the work of the group to create a cookie-cutter approach … or to create anything other than a set of recommended practices which VC firms may voluntarily adopt.” Public discussion of the group’s proposals is unlikely to happen before this fall.