Continued Demand for Credit Managers Who are GIPS Compliant

In recent years, the investment management landscape has seen a significant shift towards greater transparency and standardization. One notable trend is the increasing demand for public and private credit firms to claim compliance with the Global Investment Performance Standards (GIPS^®).

Historically, GIPS compliance was primarily pursued by managers with liquid strategies offered to separately managed accounts (SMA). The composite framework allowed for the presentation of performance for a specific strategy with the understanding that the manager had not cherry picked the best performers.

However, we are now witnessing a notable shift as diverse managers with a range of asset classes and vehicle types also seek compliance with the standards. The CFA Institute recognized this evolution and released the 2020 GIPS Standards to provide standardization and best practices around the presentation of both SMA and fund performance for all asset classes. This trend underscores the broader industry acknowledgment that adherence to these standards is essential not only for attracting institutional investors but also for competing effectively in a crowded market.

The emphasis on GIPS compliance among top credit managers further illustrates this shift. Of the top 10 global credit managers, nine claim GIPS compliance and utilize ACA as their verifier. Furthermore, more than 63% of the top 30 credit managers ranked by CLO Research Group and reported by the GIPS standards compliance website, highlighting the widespread adoption of these standards across the sector. This is a 10% increase from the last time we saw a focus on GIPS compliance within the credit space.

A key driver behind this surge in both independent verification and GIPS compliance is the increasing number of Requests for Proposals (RFPs) that demand such compliance. For example, in September 2024, we observed one of the largest RFPs ever issued for multi-asset credit strategy. This RFP, issued for a large public pension fund with over $30 billion in assets under management, sought qualified investment managers to handle fixed income portfolios that span multiple credit asset classes, including high yield, leveraged loans, and securitized credit issues. The mandate ranged from $200 million to $500 million, with a potential cap of $2 billion. Notably, GIPS compliance was a mandatory requirement for this RFP.

How we help

As this RFP demonstrates, claiming GIPS compliance may be a business advantage that can help your firm attract business. We can help.

Partnering with ACA for your GIPS compliance provides a comprehensive solution centered on the core pillars of GIPS compliance. Our approach emphasizes expert consulting, thorough assessment of performance calculations, and the development of robust policies and procedures, providing a robust framework for firms seeking full GIPS compliance. Our services include:

• GIPS composite maintenance and calculation outsourcing: We can manage the entire GIPS 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.
• GIPS feasibility study: We can help you quantify the scope and effort to become GIPS compliant with a GIPS standards feasibility study. This service assists a firm in identifying the gaps to GIPS compliance.
• GIPS verification services: We can provide internal and external assurance with GIPS compliance consulting and verification. Verification is conducted on an annual basis looking at the prior periods as required by the GIPS Standards for Verifiers.

If you would like to get in touch with our team today, we're ready to help. Start a conversation with us below.

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