Yes, Yield Can Be Presented Gross of Fees! We now have clearer guidance regarding the application of Rule 206(4)-1 under the Investment Advisers Act of 1940, as amended SEC Marketing Rule, providing registered investment advisers with a clear path for presenting extracted performance and certain portfolio characteristics on a gross […]
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Composite Management Systems Can Lighten the Operations Load for Investment Managers
In today’s fast-paced investment environment, many firms are seeking ways to streamline their processes and reduce the operational burden on their teams. For those managing composites, this is particularly important, especially as they grow and accumulate more client accounts under management. The operational demands of tracking performance, ensuring compliance, and […]
Continue ReadingChallenges Firms Continue to Face When Complying with the SEC Marketing Rule
The SEC Marketing Rule (the “Marketing Rule”) has been in effect for nearly two years and remains a central focus of the SEC’s 2024 exam priorities. The 28th Annual Global Investment Performance Standards (GIPS®) Conference was held in San Diego, California on September 17-18, 2024. The opening session of the […]
Continue ReadingUse of AI in Investing and Performance
On September 17, 2024, at the 28th Annual Global Investment Performance Standards (GIPS®) Conference in San Diego, one of the standout sessions was on the Use of AI in Investing and Performance. As artificial intelligence (AI) becomes a cornerstone of innovation across industries, the investment management sector is no exception. […]
Continue ReadingApplication of the GIPS® Standards to Pooled Funds
Originally designed to standardize performance reporting for individual separately managed accounts, the Global Investment Performance Standards (GIPS® standards) have evolved over time to accommodate the complexities of pooled funds – encompassing mutual funds, hedge funds, and other collective investment vehicles where ownership interests may be held by more than one […]
Continue ReadingSEC Releases 4th FAQ Related to SEC Marketing Rule
SEC staff advises that private fund sponsors that exclude the impact of subscription credit facilities when showing a gross internal rate of return in their advertisements also must exclude such impact when showing the corresponding net internal rate of return. On February 6, 2024, the U.S. Securities and Exchange Commission […]
Continue ReadingHypothetical Performance Under SEC Marketing Rule
Under the SEC Marketing Rule, firms are limited in how they are allowed to distribute and use presentations that include hypothetical performance. All materials that include hypothetical performance – even if only distributed to one individual in a one‐on‐one setting – must be viewed as advertisements. Further, investment advisers are […]
Continue ReadingImpact of FINRA Regulatory Notice 20-21 on Performance Presentations
The Financial Industry Regulatory Authority (FINRA) has issued Regulatory Notice 20-21 (the “Regulatory Notice”) which allows retail communications concerning private placement offerings to present the fund’s internal rate of return (IRR) under certain conditions. In particular, the Regulatory Notice prescribes that such information must be “calculated in a manner consistent […]
Continue ReadingSEC Marketing Rule – Key Highlights for GIPS® Compliant Firms
The adoption of the SEC’s new Marketing Rule will have broad ramifications on investment advisers’ marketing activities. Following are some of the key areas that may directly impact firms that claim compliance with the GIPS standards and the manner in which they present performance in the future. We have summarized […]
Continue Reading2020 GIPS® Standards – Evolving Real Estate Guidance
One of the objectives that was considered when the 2020 edition of the GIPS standards was drafted was to reduce the amount of asset class specific guidance. The goal was to homogenize the guidance as much as possible so that it could be applied more universally across asset classes. This […]
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