At the request of the investor community, the NCREIF PREA Reporting Standards Council developed a real estate supplement (“RS Supplement”) to the ILPA Reporting Template for Fees Expenses and Carried Interest. “The ILPA Reporting Template has gone a long way towards bringing standardization and transparency to the private equity industry. We are pleased that the Reporting Standards’ initiative expands that mandate to include specific real estate costs by providing a Real Estate specific supplement,” stated Mike DiRé, Director of Real Estate at California State Teachers’ Retirement System (“CalSTRS”).

Benefits to investors and investment managers include:

  • For investors, the RS Supplement:
    • Fosters comparability within real estate specific programs as well as more broadly across private market investment programs, as an asset class
    • Provides investor specific reporting with flexibility on frequency of receipt of information from investment managers as well as the extent of information provided
    • Facilitates reporting to executive leadership, government and regulatory organizations
  • For investment managers, the RS Supplement:
    • Starts with the capture of fees, costs and related party information already needed to satisfy fund reporting requirements
    • Supports apples to apples comparison within a peer group

The RS Supplement does not change the existing ILPA Reporting Template which was created to respond to investor demand for improved disclosures surrounding fees, expenses and carried interest within private equity investment. Private real estate and private equity have unique structural and strategic attributes and represent different risk/return profiles within an investor’s portfolio. Although performance may differ, the costs associated with achieving that performance should be comparable. Investors receiving disparate information surrounding fees, expenses and carried interest from their real estate find it challenging to aggregate or develop meaningful comparisons of this information across their program. Accordingly, the NCREIF PREA Reporting Standards Council felt it was critical to address the investor’s need for consistent and transparent information across their private market investment portfolios. “This ensures consistent apples to apples reporting across our Real Estate portfolio. We look forward to this implementation which will greatly improve our analysis of our portfolio as well as transparency within our industry,” concluded Mr. DiRé.

“We believe transparency and consistent access to high quality fee and expense data is foundational to the success of long-term partnerships in the private markets and support this effort by the Council to raise the bar in the Real Estate realm,” said Steve Nelson, CEO of ILPA.

The RS Supplement is available for immediate use and can be found here. An instructional video on how to complete the RS Supplement will be available in July 2019. The ultimate success of this tool depends upon the support of the investor community. Since its release, the ILPA Reporting Template has been adopted by hundreds of LP and GP organizations. Investors are encouraged to adopt and utilize the RS Supplement to capture and report information for real estate.

Questions surrounding the use and applicability of the template should be addressed to administrator@reportingstandards.info or by consulting the frequently asked questions section on the Reporting Standards website. A link to the RS Supplement can also be found on the ILPA website at www.ilpa.org.