Of the 300 largest pensions funds, 50 largest US-based endowments, and 50 largest US-based foundations, 67.3% require or ask about GIPS compliance when selecting external managers while 89% are familiar with the GIPS standards. Just under 28.7% of these organizations either claim compliance or are in the process of claiming compliance with the GIPS standards.1
With this level of familiarity and appreciation for the value placed on a claim of GIPS compliance when selecting external managers, it’s no surprise there has been an increased demand for asset owner compliance. Also contributing to the increase in adoption is the development of asset-owner specific guidance in 2020 (GIPS Standards for Asset Owners) by CFA Institute as well as additional resources now available:
Asset owners are considering adoption for a variety of reasons, including enhanced regulator and investor trust, improved efficiency and scalability of investment performance processes, comparability of performance reporting across internally and externally managed assets, and furthering a culture of compliance. An asset owner claiming GIPS compliance demonstrates to its oversight body, legislative body, and the general public:
- A commitment to industry best practices and globally accepted ethical standards
- A commitment to the performance standards typically required of external investment managers, including adherence to thorough investment performance policies and procedures
- It’s participants and beneficiaries can rely on decision-making supported by the principles of fair representation and full disclosure of investment results
Interested in hearing more about GIPS compliance from other asset owners?
GIPS for Asset Owners: Why Adopt a Voluntary Standard?
Webinar featuring Rob Patterson, CIPM, FRM, CalPERS
AIA’s Journey to GIPS Compliance
Case study in future-proofing investment operations provided by CFA Institute
5-minute video (CFA Institute)