The CPP Investment Board has expanded its public disclosure on private equity so that Canadians can better understand how this asset class performs.

It will be disclosing on a quarterly basis the commitment and capital drawn, the reported value by the fund manager, and distributions received by the CPP Investment Board.

The CPP Investment Board has interests in portfolios that contain hundreds of private companies in Canada, the United States and Europe. These interests are held in limited partnerships with other investors. The fund managers decide on behalf of investors which companies to invest in and when to sell.

Confidentiality agreements enable fund managers to protect information that gives them a competitive advantage in identifying, analyzing, investing in and nurturing ventures that could grow into large and profitable corporations. Compliance
with these agreements is a condition of participation. The CPP Investment Board honours all such agreement.

The CPP Investment Board does not disclose interim internal rates of return because they are not the best indicators of how a fund is performing and will perform over its full life.

Reported values of private equity funds are not comparable for a variety of factors, says the board. One fund may be in the formative stage, where costs have a larger negative impact on results in the initial years. Another fund may be divesting companies and distributing the net proceeds to investors.

Furthermore, there are no generally accepted standards, practices or policies for reporting private equity valuations and general partners use different valuation and accounting policies and practices.