Private Equity Accounting, Investor Reporting, and Beyond, 2nd Edition

Description

Today's only advanced comprehensive guide to private equity accounting, investor reporting, valuations and performance measurement provides a complete update to reflect the latest standards and best practices, as well as the author's unique experience teaching hundreds of fund professionals. In Private Equity Accounting, Investor Reporting and Beyond  Mariya Stefanova brings together comprehensive advanced accounting guidance and advice for all private equity practitioners and fund accountants worldwide: information once available only by learning from peers.

Replete with up-to-date, user-friendly examples from all main jurisdictions, this guide explains the precise workings and lifecycles of private equity funds; reviews commercial terms; evaluates structures and tax treatments; shows how to read Limited Partnership Agreements; presents best-practice details and processes, and identifies costly pitfalls to avoid.

Sample Content

Table of Contents

PART I:  PRIVATE EQUITY ACCOUNTING, INVESTOR REPORTING, AND BEYOND     1
Chapter 1  Private Equity Structures and Their Impact on Private Equity Accounting and Reporting     3
Structuring Considerations in Private Equity     4
Main Building Blocks and Vehicles of a PE Structure      6
    Domiciliation: Where to Form the Fund—Onshore or Offshore?     9
    Simple or Complex?     9
Using a Combination of Vehicles     10
    Master-Feeder Funds     11
    Structures Involving Blockers     13
    Parallel Structures     14
    Master-Feeder or Parallel Structure?     15
Alternative Private Equity Structures     16
Summary     17
Chapter 2  The Importance of Allocations and Allocation Rules     19
Introduction: Why Start with Allocations and Allocation Rules?      20
What Is an Allocation Rule, and Why Is It So Important in Private Equity Accounting?      20
    Types of Allocation Rules     21
Why Are Different Allocation Rules Used? Is Excel-Based Accounting Adequate?      22
How Do Inaccurate Allocations Affect Investors?      27
How Can You Identify the Allocation Rules in an LPA?      27
What Do You Do If the Allocation Rules Stipulated in the LPA Are Flawed?     28
What Is the Best Way of Doing Allocations?      29
    A Word of Caution for LPs     30
Summary     30
    Last Advice for LPs     30
    Last Advice for GPs     31
Chapter 3  Private Equity Accounting Processes: Some Neglected Processes That Could Expose GPs     33
Introduction     34
Some Neglected Private Equity Accounting Processes     35
    Rebalancing     35
    Partner Transfers/Assignments     37
Summary     40
Chapter 4  Investor Reporting: ILPA versus IPEV IRG     41
Introduction     42
Existing Accounting Frameworks and GAAPs Used in Private Equity     43
What Is Investor Reporting?     44
Existing Reporting Framework      45
Comparisons among ILPA, IPEV, and EVCA Reporting Guidelines     45
Transition from EVCA RG and Other Local Reporting Guidelines to IPEV IRG     50
ILPA or IPEV IRG Compliant?      51
Summary     52
Endnotes     52
Chapter 5  ESG Reporting and Responsible Investing     53
Introduction     54
Why ESG and RI?      55
Potential Material Impacts of ESG Factors and Value Creation     56
What Are the Implementation Challenges?      57
Some ESG Issues     57
Sample Procedure for RI and ESG Implementation     58
    Stage 1: Developing an RI Policy     59
    Stage 2: Identifying Specific ESG Factors and Risks     59
    Stage 3: Implemen

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