BRITISH buyout firms, which own companies employing a fifth of the private-sector workforce, are willing to open their books to greater public scrutiny, the industry’s leader said last week.

John Mackie, chief executive of the British Venture Capital Association, said: “What we expect in general, as the asset class grows and develops by a process of evolution, is that we will get greater disclosure.”

Mackie was speaking in the wake of reports claiming that the private-equity industry would oppose greater disclosure of their funds’ performance.

Until now, information on the returns generated has been restricted to fund investors. Under the new Freedom of Information Act, they are coming under pressure to report profits publicly. The industry has traditionally restricted this information to its clients.

Graeme White, head of Barclays Private Equity, said: “With investors in the US already disclosing performance information, it is difficult to see why fund managers should not be prepared to disclose fund returns publicly across the board, not just in relation to local authorities.”

Another industry executive said: “Ten years from now there will be as much information on private-equity funds as there is on stock and bond investments. It’s an evolutionary process.”

Buyout funds use a mix of equity and debt to acquire businesses that they then try to improve with a view to selling them on, typically after three to five years.

But the industry remains opposed to being forced to disclose information about the individual companies it owns.

To improve the businesses they have bought, buyout firms sometimes replace management teams, make staff redundant, and increase borrowing to cover costs.

“If this kind of material got out to the public, it could be very damaging,” said one industry executive. “And if we were forced to put this material into the public arena, we’d stop producing it in written form, and transparency would suffer.”

The push for disclosure was in part led by Private Equity Intelligence, a firm that sells fund-performance information. It wrote to 130 local authorities at the start of 2005 asking for profit figures from any private-equity fund in which they invested. Three of the 30 firms that replied rejected the request.