The Real Estate Manager's Path to Compliance with the GIPS Standards

In an ever-evolving industry, the demand for more information and transparency from asset managers continues to increase. Investors seeking comparability amongst asset managers, including real estate firms, are increasingly requiring managers to comply with voluntary ethics-based reporting guidelines such as the Global Investment Performance Standards (GIPS®). While real estate firms targeting institutional dollars have likely heard of the GIPS standards, a focus on core business activities often takes precedence and these firms are  unable to find the time or resources necessary to learn the intricacies and the potential benefits of the GIPS standards. 

Real estate managers raising funds through intermediaries, such as placement agents, bank-platforms, or other types of registered broker-dealers, must be aware of a potential new hurdle that they can face while engaging with these intermediary channels. Such channels, in some cases, require legal representation of internal rate of return (IRR) calculations illustrating that they are consistent with the GIPS Standards and include additional GIPS-required metrics such as paid-in-capital, committed capital, and distributions paid to investors.

As SEC registered firms assess the impact of the new SEC Marketing Rule to their current practices, firms may find GIPS compliance to be a good way to manage those key changes. 

In the current real estate investment environment, many firms want to understand the core components of the GIPS standards before committing the resources needed to attain compliance. Firms that already claim compliance seek to mitigate the risk of becoming noncompliant. This paper provides useful information for both objectives.

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Compliance is Easier Than You Think: The Real Estate Manager's Path to Compliance with the GIPS Standards focuses on unique issues facing real estate managers and the common solutions to those issues. We provide a market overview and cover frequent concerns for firms claiming compliance with the GIPS standards, as well as a brief comparison of the GIPS standards to the NCREIF and PREA Reporting Standards (formerly known as REIS).

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Join our Webcast Discussion

Join ACA’s Tanner Beverly, Rosellen Bounds, Shivani Choudhary, and Chase Frei for a webcast discussion on September 29, 2021, at 11 a.m. EDT to review how to claim compliance. During this webcast we will discuss the details covered in the series including:
•    firm definition, 
•    discretion, 
•    composite construction, 
•    account and composite return calculations,
•    GIPS Reports, 
•    portability, and 
•    supplemental information. 
The presentation will be followed by an interactive Q&A with our team of performance professionals.

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Compliance with the 2020 GIPS Standards

We have helped many firms in their efforts to claim compliance with the GIPS standards. For more information or questions, please reach out to your ACA consultant or contact us below.

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Related Stories 

• The 2020 GIPS Standards: Explanation of the Provisions for Firms – Sections 1 and 3
• The 2020 GIPS Standards: Explanation of the Provisions for Firms – Section 2
• The 2020 GIPS Standards: The Top Changes You Need to Know