A new survey of institutional asset managers, consultants and investors confirms compliance with the Global Investment Performance Standards (GIPS) is on the rise, with 84 per cent of asset managers responding saying their firms are GIPS compliant.
This is up from 72 per cent who claimed compliance in 2014, the last time institutional investment analytics firm eVestment and consulting firm ACA Compliance Group conducted this survey of eVestment users.
This increase is driven by investor and consultant activity, as 75 per cent 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 Compliance Group 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.
“The survey results indicate a potential major shift for alternative managers, with three out of four consultant responses indicating that they expect to start requiring hedge fund and private equity managers to comply with the GIPS standards,” says Justin Guthrie, ACA’s Head of Performance Services. “This is a fundamental change to asset classes that have historically had very low rates of 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,” says eVestment Global Head of Strategic Engagement John Molesphini (pictured). “The increases across the board in the findings of this new GIPS survey are further evidence of this trend.”