Having read the PE sector guidance, I have one central question: Would it also be possible to commit the GP itself and only certain funds (products), even though other funds which meet the relevant and required asset class definitions (typical buyout funds) would be excluded?
PE-C2 suggests that there is flexibility, given the term “should”: PE firms should submit targets at the group level for all of its subsidiaries/ funds. So does PE-R1, as accounting and reporting is performed on a fund-level and not consolidated.
Thanks for your help.
Per PE-C17, PE firms shall set targets on all relevant ‘Required Activities’ outlined in Table 6.1 following the minimum boundary coverage requirement. And per PE-C1, targets shall be submitted at the GP level.
As such, the GP cannot exclude a certain fund if it includes investments that are required to be covered by a target as outlined in Table 6.1. For example, it is possible that all the investments in a particular fund are buyout investments that do not meet the ‘shares and board seat’ condition and are thus not required to be covered (though PE firms are welcome to) but not all funds may be so clear cut, in which case the relevant and required investments within these funds would need to be included.
Hope that answers your question.