The survey collected answers from 63 property owners across America, EMEA (Europe, Middle East and Africa) and within the Asian -Pacific area. The survey participants included a mix of pension funds, foundations, insurance firms, sovereign assets and family offices. The aim of the survey was to find out how these organizations manage and report the investment performance and the right way to use the plaster standards.
The plaster standards
The plaster standards were originally designed in such a way that the performance reports through investment managers give uniformity and integrity. In a big 2020 update, nonetheless, a version was introduced that’s specially tailored to owners of assets – firms that normally don’t compete for purchasers, but still compete on the worst and obligation, since they often manage essential portfolios. This version of the plaster standards ensures that the consistency within the calculation and presentation of asset owners in internal and externally managed assets ensures.
The latest survey results are a promising picture. The familiarity with the plaster standards by asset owners is widespread, and compliance claims are increasing steadily. This reflects growing recognition among the many owners of assets concerning the benefits that these global standards offer – not only with regard to the performance presentation, but additionally in the choice and evaluation of external managers, especially in increasingly complex investment environments wherein each liquid and illiquid assets are involved.
Here are six essential snack bars from the report:
- Widespread awareness, growing compliance: Impressive 93% of the respondents stated at the very least a certain familiarity with the plaster standards. Of these, 31% already stated that compliance with lower than 21% in 2020 and one other 9%.
- Stronger supervision of external managers: Asset owner increasingly prioritize the GIP compliance when selecting external managers. For liquid assets similar to stocks and glued income require or ask 68% to comply with plaster through the managerial selection. For illiquid asset classes, including private equity and real estate, this number is 41%.
- Improved return transparency: Most asset owners (56%) issue their supervisory authorities, who’re prescribed in response to the GIPS standards, contemporary returns (TWRS). However, 42% go one step further and in addition deliver money-weighted returns (MWRS), which offers a more comprehensive image of the investment performance performance that makes up for timing and the dimensions of the money flows.
- Many near compliance without explaining it: Interestingly, 59% of the owners of assets already provide net-of-fever return on their supervisory authorities one in every of the core requirements of the GIPS standards. This shows that many organizations already do a big a part of the work required for compliance with plaster and will only must formulate their reporting with a purpose to officially request compliance with compliance.
- Illiquid assets are a principal focus: More than 90% of the owners of assets surveyed are exposed to illiquid investments, and almost half (45%) have between 26% and 50% of their assets for such investments. This increases the need of clear and consistent performance standards that may include the unique properties of those asset classes.
- Various benchmarking practices: The Benchmark Use develops further. While 59% of the respondents only use a benchmark, 41% use several benchmarks, with some as much as five. The most typical benchmarks are weighted in accordance with the goals of the wealth class (with 61%).
Overall, the survey of 2024 shows a growing commitment among the many owners of assets for the introduction of world standards that support fair, consistent and transparent investment reporting. If the compliance continues to extend, the pressure on the external managers of aligning themselves with crucial global performance standards will probably also increase.
