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Investment Performance
Arithmetic vs Geometric Mean: Which to use in Performance Appraisal
Most performance appraisal measures utilize a mean return in its calculation. This can be in the form a geometric mean or a simple arithmetic average. Because both types of means can be used, it raises the question: Which measure should be applied? When calculating performance, we are accustomed to calculating returns geometrically (i.e., including compounding). […]
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GIPS Compliance
GIPS 2020: What’s Changing and What You Should Do (Updated July 2019)
It has been a busy couple of weeks for GIPS! On August 31st, the Exposure Draft of the 2020 Global Investment Performance Standards (GIPS®) was released for public comment and last week (September 14th and 15th) was the GIPS conference. With this exposure draft being released only two weeks before the conference, the forthcoming changes to […]
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Longs Peak News
A Personal Note From Our Founder
Today, September 3, 2018, Longs Peak turns 3 years old! Over the last 3 years we have provided investment performance and GIPS consulting services to over 70 investment firms and we are proud that, for many of these firms, we helped them claim compliance with the GIPS standards for the first time. To celebrate this […]
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GIPS Compliance
How to Advertise as a GIPS Compliant Firm
Most GIPS compliant firms are aware of the requirement to provide their compliant presentations to prospective clients, but it can be a little confusing how to reference GIPS in other materials. It is important to remember that you should never just casually reference your firm’s GIPS compliance without considering what disclosures are required to accompany […]
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GIPS Compliance
Creating GIPS Compliant Presentations
Firms that are GIPS compliant are required to provide all prospective clients with a GIPS compliant presentation. Typically, each composite has its own separate one-page sheet that includes all the statistics and disclosures required for that composite. This one-page sheet can be attached as an appendix to your firm’s pitchbooks and other marketing materials to […]
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GIPS Compliance
Investment Performance
How to Construct Composites
GIPS compliant firms are required to calculate and present composite performance, rather than presenting the performance of a model or single representative account. The purpose of this is to ensure investment managers are presenting an accurate representation of their ability to implement a strategy, rather than “cherry-picking” their best performing portfolio. As discussed in our […]
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GIPS Compliance
GIPS 20/20 Consultation Paper
The GIPS Executive Committee (“EC”) is preparing for a full re-write of the GIPS standards, which they are referring to as GIPS 20/20. It is referred to as GIPS 20/20 as it is a “vision” for the future of the standards and because it also is intended to be rolled out in the year 2020. […]
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GIPS Compliance
Part 2: Creating GIPS Policies and Procedures
Calculation Methodology, Books & Records, Composite Definitions & Rules, and Error Correction Policies As discussed in Part 1 of this two part series, GIPS compliant firms are required to document how they comply with the GIPS requirements as well as any recommendations that the firm chooses to follow. This document acts as the firm’s internal […]
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GIPS Compliance
Part 1: Creating GIPS Policies and Procedures
Firm Definition and Definition of Discretion GIPS compliant firms are required to document how they comply with the GIPS requirements as well as any recommendations that the firm chooses to follow. This document acts as the firm’s internal representation of their GIPS compliance, and is intended to state the firm’s policies and describe the procedures […]
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