A just-released survey of institutional asset managers, consultants and investors confirms compliance with the Global Investment Performance Standards (GIPS®) is on the rise, with 84% of asset managers responding saying their firms are GIPS compliant. This is up from 72% who claimed compliance in 2014, the last time eVestment and consulting firm ACA Compliance Group conducted this survey of eVestment users.
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Q2 hedge fund letters, conference, scoops etc
This increase is driven by investor and consultant activity, as 75% of investors and consultants responding to the 2018 survey said they exclude managers from searches some or all of the time if they do not claim GIPS compliance. This is up from two out of three investors/consultants who said they excluded managers from searches some or all of the time if they do not claim compliance with GIPS in the 2014 survey.
For the first time, eVestment and ACA also asked for insights from private equity, hedge fund and other alternative investment managers, as well as from consultants and investors working with alternatives managers, about their thoughts on GIPS. As a result, the 2018 data related to alternative investments does not have a 2014 benchmark.
Some top-level findings from the new survey include:
- 94% of asset management firms that claim compliance receive a verification, up from 87% who reported being verified in the 2014 survey.
- Among investors and consultants, 75% said third-party verification is important or very important in their manager search process.
- 94% of consultants/investors believe more pension funds, foundations, endowments and other asset owners will claim compliance with GIPS when GIPS 2020 is released.
- 67% of alternative asset managers believe investors and consultants will ultimately require alternative managers to comply with GIPS.
- Asset manager size appears correlated with claiming GIPS compliance, with 72% of firms with AUM below $500 million claiming compliance, while 81% of firms with AUM over $20 billion claim compliance.
The institutional investment industry is moving toward more transparency across all asset classes, which is something eVestment has championed since our founding in 2000. The increases across the board in the findings of this new GIPS survey are further evidence of this trend.
I’ll be joining Justin Guthrie, ACA’s Head of Performance Services, for a webinar on September 6 at 11 a.m. Eastern Time to talk more about the survey findings, how they’ve changed over the years and how these changes are impacting the institutional investment asset management business.
Article by eVestment
