Historically, the Global Investment Performance Standards (GIPS®) have been tailored more toward the institutional, long-only asset manager. Many institutional investors such as endowments, foundations, and pension plans have been increasing their target allocations to include alternative assets as a larger component of a well-diversified portfolio. Investors are seeking greater transparency into how performance is calculated and frequently inquire in RFPs about GIPS compliance. Regulatory change, including the SEC’s new Marketing Rule is requiring managers to revisit how they present performance in their marketing and advertising.
This white paper will discuss some of the considerations that hedge fund managers must make when claiming compliance with the GIPS standards.