Case Study: Comprehensive GIPS Management and Oversight

Company: Private credit fund and SMA manager
Location: U.S.
Financial Services Sector: Private credit

Background

A private credit firm needed to establish and maintain a robust Global Investment Performance Standards (GIPS^®) framework. With private funds and a composite covering multiple separately managed accounts (SMAs), the firm lacked internal resources and expertise to effectively oversee the framework.

Challenge

Similar to many of its peers in the private credit space, the firm had limited internal performance resources, particularly for the complexities of private fund performance calculations and GIPS compliance. Without a dedicated performance team, the firm faced challenges maintaining composite and fund-level performance calculations and GIPS report updates and overseeing the verification process.

Solution

We assist the firm by managing and overseeing its GIPS standards framework.
Our role includes:

• Development and maintenance of a comprehensive GIPS standards policy manual
• Quarterly updates of private fund internal rates of return (IRRs)
• Composite maintenance and ongoing account inclusion analysis
• Update and maintaine GIPS reports for both the composite and limited distribution pooled funds
• Oversight of the firm’s annual GIPS standards verification process

Additionally, the firm leverages us as a subject matter expert in performance-related discussions, incorporating our consultants in conversations around new product and fund launches to ensure alignment with best practices.

Results

Rather than implementing a new framework, we provide the expertise needed to manage and refine the firm’s existing structure to align with the GIPS standards. We refreshed policies and procedures to align with best practices, introduced structured processes for quarterly IRR updates, and formalized composite management workflows. Our oversight helps ensure that the firm’s GIPS reports remain accurate and comprehensive, while maintaining the integrity of the firm’s original framework.

We also play a critical advisory role, assisting the firm in strategic performance-related decisions and offering guidance on performance methodologies as they expand their product offerings. By overseeing the annual GIPS standards verification, we help streamline the process, reducing internal burden and providing a smooth verification experience.

Conclusion

By outsourcing the management of its GIPS standards framework, the firm achieved efficiency and scalability, allowing internal teams to focus on core investment responsibilities while mitigating the risk of falling out of compliance with the GIPS standards. Our expertise in private fund performance calculations and GIPS compliance provides the firm with the confidence to market its performance effectively and align with industry best practices.

How we help

ACA is the only governance, risk, and compliance (GRC) firm that combines regulatory compliance expertise with deep investment performance knowledge, making us uniquely positioned to assist firms navigate complex performance calculations, such as those outlined in this case study.

Whether you are looking to launch, grow, or protect your firm, utilizing our Managed Performance Services solutions allows firms to leverage unparalleled expertise, scalable solutions, and significant cost savings. Additionally, collaborating with us can enhance service offerings, strengthen risk mitigation, simplify the intricate investment process, and seize opportunities for growth and innovation. 

• Task-based solutions: We provide targeted support for performance calculations, composite management, custom track record creation and maintenance, generating performance data for marketing materials, fee calculations, risk metrics analysis, and staff augmentation.
• Private fund reporting support: Our services extend to supporting private fund reporting and Institutional Limited Partners Association (ILPA) reporting, helping firms align performance metrics with investor expectations and industry best practices across private funds and liquid funds.
• Global Investment Performance Standards (GIPS^®) compliance and verification support: We can manage the entire GIPS compliance process, including composite management, account and composite level return calculations, outlier review, policy updates, GIPS report updates, and verification oversight, providing a complete solution for firms seeking full GIPS compliance management.

Leveraging our expertise allows firms to enhance accuracy, improve efficiency, and mitigate risk while streamlining the investment performance processes. Start a conversation with us today to learn more.

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