In principle, managers should report basic data annually including the characteristics of a vehicle, commentary on vehicle performance and an analysis of the relevant KPIs. The annual report also informs investors about the vehicle’s investment strategy, risk policies and exposures and how the manager has complied with its business objectives and policies.
The annual report is commonly composed of the annual review of the performance and activities of the vehicle for the year and the financial statements prepared under relevant GAAP. As well as an annual report, managers should provide interim reports to investors. The frequency and the level of detail of interim reporting should be defined in fund documentation. Interim reports commonly aim to update investors on the activities and performances of the vehicle during the interim period covered, and provide details of any significant changes that have or could have a material impact on the vehicle’s organisation, governance and risk profile. As well as interim reports, there may be other more informal investor updates and ‘flash’ reports which are prepared on a more frequent basis (e.g., monthly), which are outside the scope of the guidelines.
Quantitative data and KPIs, as defined in the Standard Data Delivery Sheet (“SDDS”), are an integral part of investor reporting under these guidelines and such information should be included in the reports to investors. This data can be presented in a separate attachment to the annual or interim reports (using the SDDS template) or embedded into the relevant section of the report itself depending on the manager’s preference.
For convenience, the reporting guidelines are grouped into the following sections:
- Content and frequency of reporting;
- General vehicle information, organisation and governance;
- Capital structure and vehicle-level returns;
- Manager’s report;
- Property report;
- Financing and financial risk management.
Annual and interim reporting to investors may include audited annual financial statements or abridged interim financial statements prepared in accordance with the appropriate generally accepted accounting standards. The fund managers are free to present the INREV report disclosures as a single package with the audited financial statements or in two separate documents. Some managers may also opt to provide investors full financial statements on an interim basis. Such financial statements may contain some of the information required to be disclosed by these reporting guidelines and can be referred to as appropriate. Information in the respective financial statements should be consistent with information presented in annual or interim reports as a whole.
The reporting guidelines focus on the content of investor reports but do not prescribe the organisation and format of such reports.
The INREV SDDS is a standardised data tool that provides investors with the main financial management information they require in a format that allows them to easily upload the data into their own systems. Each reporting requirement has been referenced to relevant SDDS data and shows the relationship between the content of annual and interim reports.
The principles and guidelines for reporting are listed below. The frequency column indicates whether the guidelines are an annual reporting requirement or an interim reporting requirement only. Where appropriate, further explanation is provided to assist your understanding. In addition, a tools and examples section contains a debt and derivatives disclosures note, a reporting self-assessment tool, the SDDS template, and examples for a sustainability report and reporting on capital calls and distribution.