Around the Peak.

Key Takeaways from the 29th Annual GIPS® Standards Conference in Phoenix

The 29th Annual Global Investment Performance Standards (GIPS®) Conference was held November 11–12, 2025, at the Sheraton Grand at Wild Horse Pass in Phoenix, Arizona—a beautiful desert resort and an ideal setting for two days of discussions on performance reporting, regulatory expectations, and practical implementation challenges. With no updates released to the GIPS standards this year, much of the content focused on application, interpretation, and the broader reporting and regulatory environment that surrounds the standards.

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One of the few topics directly tied to GIPS compliance with a near-term impact relates to OCIO portfolios. Beginning with performance presentations that include periods through December 31, 2025, GIPS compliant firms with OCIO composites must present performance following a newly prescribed, standardized format. We published a high-level overview of these requirements previously.

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The conference also covered related topics such as the SEC Marketing Rule, private fund reporting expectations, SEC exam trends, ethical challenges, and methodology consistency. Below are the themes and observations most relevant for firms today.

Are Changes Coming to the GIPS Standards in 2030?

Speakers emphasized that while no new GIPS standards updates were introduced this year, expectations for consistent, well-documented implementation continue to rise. Many attendee questions highlighted that challenges often stem more from inconsistent application or interpretation than from unclear requirements.

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Several audience members also asked whether a “GIPS 2030” rewrite might be coming, similar to the major updates in 2010 and 2020. The CFA Institute and GIPS Technical Committee noted that:

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    ·   No new version of the standards is currently in development,

     ·   A long-term review cycle is expected in the coming years, and

     ·   A future update is possible later this decade as the committee evaluates whether changes are warranted.

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For now, the standards remain stable—giving firms a window to refine methodologies, tighten policies, and align practices across teams.

Performance Methodology Under the SEC Marketing Rule

The Marketing Rule featured prominently again this year, and presenters emphasized a familiar theme: firms must apply performance methodologies consistently when private fund results appear in advertising materials.

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Importantly, these expectations do not come from prescriptive formulas within the rule. They stem from:

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1.     The “fair and balanced” requirement,

2.     The Adopting Release, and

3.     SEC exam findings that view inconsistent methodology as potentially misleading.

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Common issues raised included: presenting investment-level gross IRR alongside fund-level net IRR without explanation, treating subscription line financing differently in gross vs. net IRR, and inconsistently switching methodology across decks, funds, or periods.

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To help firms void these pitfalls, speakers highlighted several expectations:

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     ·   Clearly identify whether IRR is calculated at the investment level or fund level.

     ·   Use the same level of calculation for both gross and net IRR unless a clear, disclosed rationale exists.

     ·   Apply subscription line impacts consistently across both gross and net.

     ·   Label fund-level gross IRR clearly, if used(including gross returns is optional).

     ·   Ensure net IRR reflects all fees, expenses, and carried interest.

     ·   Disclose any intentional methodological differences clearly and prominently.

     ·   Document methodology choices in policies and apply them consistently across funds.

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This remains one of the most frequently cited issues in SEC exam findings for private fund advisers. In short: the SEC does not mandate a specific methodology, but it does expect consistent, well-supported approaches that avoid misleading impressions.

Evolving Expectations in Private Fund Client Reporting

Although no new regulatory requirements were announced, presenters made it clear that limited partners expect more transparency than ever before. The session included an overview of the updated ILPA reporting template along with additional information related to its implementation. Themes included:
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     ·   Clearer disclosure of fees and expenses,

     ·   Standardized IRR and MOIC reporting,

     ·   More detail around subscription line usage,

     ·   Attribution and dispersion that are easy to interpret, and

     ·   Alignment with ILPA reporting practices.

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These are not formal requirements, but it’s clear the industry is moving toward more standardized and transparent reporting.

Practical Insights from SEC Exams—Including How Firms Should Approach Deficiency Letters

A recurring theme across the SEC exam sessions was the need for stronger alignment between what firms say in their policies and what they do in practice. Trends included:

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     ·   More detailed reviews of fee and expense calculations, especially for private funds,

     ·   Larger sample requests for Marketing Rule materials,

     ·   Increased emphasis on substantiation of all claims, and

     ·   Close comparison of written procedures to actual workflows.

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A particularly helpful part of the discussion focused on how firms should approach responding to SEC deficiency letters—something many advisers encounter at some point.

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Christopher Mulligan, Partner at Weil, Gotshal & Manges LLP, offered a framework that resonated with many attendees. He explained that while the deficiency letter is addressed to the firm by the exam staff, the exam staff is not the primary audience when drafting the response.

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The correct priority order is:

1. The SEC Enforcement Division

Enforcement should be able to read your response and quickly understand that: you fully grasp the issue, you have corrected or are correcting it, and nothing in the finding merits escalation.

Your first objective is to eliminate any concern that the issue rises to an enforcement matter.

2. Prospective Clients

Many allocators now request historical deficiency letters and responses during due diligence. The way the response is written—its tone, clarity, and thoroughness—can meaningfully influence how a firm is perceived.

A well-written response shows strong controls and a culture that takes compliance seriously.

3. The SEC Exam Staff

Although examiners issued the letter, they are the third audience. Their primary interest is acknowledgment and a clear explanation of the remediation steps.

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Mulligan emphasized that firms often default to writing the response as if exam staff were the only audience. Reframing the response to keep the first two audiences in mind—enforcement and prospective clients—helps ensure the tone, clarity, and level of detail are appropriate and reduces both regulatory and reputational risk.

Final Thoughts

With no changes to the GIPS standards introduced this year, the 2025 conference in Phoenix served as a reminder that the real challenges involve consistency, documentation, and communication. OCIO providers in particular should be preparing for the upcoming effective date, and private fund managers continue to face rising expectations around transparent, well-supported performance reporting.

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Across all sessions, a common theme emerged: clear methodology and strong internal processes are becoming just as important as the performance results themselves.

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This is exactly where Longs Peak focuses its work. Our team specializes in helping firms document and implement practical, well-controlled investment performance frameworks—from IRR methodologies and composite construction to Marketing Rule compliance, fee and expense controls, and preparing for GIPS standards verification. We take the technical complexity and turn it into clear, operational processes that withstand both client due diligence and regulatory scrutiny.

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If you’d like to discuss how we can help strengthen your performance reporting or compliance program, we’d be happy to talk. Contact us.

From Compliance to Growth: How the GIPS® Standards Help Investment Firms Unlock New Opportunities

For many investment managers, the first barrier to growth isn’t performance—it’s proof.
When platforms, consultants, and institutional investors evaluate new strategies, they’re not just asking how well you perform; they’re asking how you measure and present those results.

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That’s where the GIPS® standards come in.

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More and more investment platforms and allocators now require firms to comply with the GIPS standards before they’ll even review a strategy. For firms seeking to expand their reach—whether through model delivery, SMAs, or institutional channels—GIPS compliance has become a passport to opportunity.

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The Opportunity Behind Compliance

Becoming compliant with the GIPS standards is about more than checking a box. It’s about building credibility and transparency in a way that resonates with today’s due diligence standards.

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When a firm claims compliance with the GIPS standards, it demonstrates that its performance is calculated and presented according to globally recognized ethical principles—ensuring full disclosure and fair representation. This helps level the playing field for managers of all sizes, giving them a chance to compete where it matters most: on results and consistency.

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In short, GIPS compliance doesn’t just make your reporting more accurate—it makes your firm more credible and discoverable.

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Turning Complexity Into Clarity

While the benefits are clear, the process can feel overwhelming. Between defining the firm, creating composites, documenting policies and procedures, and maintaining data accuracy—many teams struggle to find the time or expertise to get it right.

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That’s where Longs Peak comes in.

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We specialize in simplifying the process. Our team helps firms navigate every step—from initial readiness and composite construction to quarterly maintenance and ongoing training—so that compliance becomes a seamless part of operations rather than a burden on them.

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As one of our clients put it, “Longs Peak helps us navigate GIPS compliance with ease. They spare us from the time and effort needed to interpret what the requirements mean and let us focus on implementation.”

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Real Firms, Real Impact

We’ve seen firsthand how GIPS compliance can transform firms’ growth trajectories.

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Take Genter Capital Management, for example. As David Klatt, CFA and his team prepared to expand into model delivery platforms, managing composites in accordance with the GIPS standards became increasingly complex. With Longs Peak’s customized composite maintenance system in place, Genter gained the confidence and operational efficiency they needed to access new platforms and relationships—many of which require firms to be GIPS compliant as a baseline.

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Or consider Integris Wealth Management. After years of wanting to formalize their composite reporting, they finally made it happen with our support. As Jenna Reynolds from Integris shared:

“When I joined Integris over seven years ago, we knew we wanted to build out our composite reporting, but the complexity of the process felt overwhelming. Since partnering with Longs Peak in 2022, they’ve been instrumental in driving the project to completion. Our ongoing collaboration continues to be both productive and enjoyable.”

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These are just two examples of what happens when compliance meets clarity—firms gain time back, confidence grows, and new business doors open.

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Why It Matters—Compliance as a Strategic Advantage

At Longs Peak, we believe compliance with the GIPS standards isn’t a cost—it’s an investment.

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By aligning your firm’s performance reporting with the GIPS standards, you gain:

• Access to platforms and institutions that require GIPS compliant firms.
• Credibility and trust in an increasingly competitive landscape.
• Operational efficiency through consistent data and documented processes.
• Scalability to support multiple strategies and distribution channels.

Simply put: compliance fuels confidence—and confidence drives growth.

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Simplifying the Complex

At Longs Peak, we’ve helped over 250 firms and asset owners transform how they calculate, present, and communicate their investment performance. Our goal is simple: make compliance with the GIPS standards practical, transparent, and aligned with your firm’s growth goals.

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Because when compliance works efficiently, it doesn’t slow your business down—it helps it reach further.

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Ready to turn compliance into a growth advantage?

Let’s talk about how we can help your firm simplify the complex.

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📧 hello@longspeakadvisory.com
‍🌐 www.longspeakadvisory.com

Performance reporting has two common pitfalls: it’s backward-looking, and it often stops at raw returns. A quarterly report might show whether a portfolio beat its benchmark, but it doesn’t always show why or whether the results are sustainable. By layering in risk-adjusted performance measures—and using them in a structured feedback loop—firms can move beyond reporting history to actively improving the future.

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Why a Feedback Loop Matters

Clients, boards, and oversight committees want more than historical returns. They want to know whether:

·        performance was delivered consistently,

·        risk was managed responsibly, and

·        the process driving results is repeatable.

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A feedback loop helps firms:

·        define expectations up front instead of rationalizing results after the fact,

·        monitor performance relative to objective appraisal measures,

·        diagnose whether results are consistent with the manager’s stated mandate, and

·        adjust course in real time so tomorrow’s outcomes improve.

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With the right discipline, performance reporting shifts from a record of the past toa tool for shaping the future.

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Step 1: Define the Measures in Advance

A useful feedback loop begins with clear definitions of success. Just as businesses set key performance indicators (KPIs) before evaluating outcomes, portfolio managers should define their performance and risk statistics in advance, along with expectations for how those measures should look if the strategy is working as intended.

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One way to make this tangible is by creating a Performance Scorecard. The scorecard sets out pre-determined goals with specific targets for the chosen measures. At the end of the performance period, the manager completes the scorecard by comparing actual outcomes against those targets. This creates a clear, documented record of where the strategy succeeded and where it fell short.

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Some of the most effective appraisal measures to include on a scorecard are:

·        Jensen’s Alpha: Did the manager generate returns beyond what would be expected for the level of market risk (beta) taken?

·        Sharpe Ratio: Were returns earned efficiently relative to volatility?

·        Max Drawdown: If the strategy claims downside protection, did the worst loss align with that promise?

·        Up- and Down-Market Capture Ratios: Did the strategy deliver the participation levels in up and down markets that were expected?

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By setting these expectations up front in a scorecard, firms create a benchmark for accountability. After the performance period, results can be compared to those preset goals, and any shortfalls can be dissected to understand why they occurred.

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Step 2: Create Accountability Through Reflection

This structured comparison between expected vs. actual results is the heart of the feedback loop.

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If the Sharpe Ratio is lower than expected, was excess risk taken unintentionally? If the Downside Capture Ratio is higher than promised, did the strategy really offer the protection it claimed?

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The key is not just to measure, but to reflect. Managers should ask:

·        Were deviations intentional or unintentional?

·        Were they the result of security selection, risk underestimation, or process drift?

·        Do changes need to be made to avoid repeating the same shortfall next period?

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The scorecard provides a simple framework for this reflection, turning appraisal statistics into active learning tools rather than static reporting figures.

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Step 3: Monitor, Diagnose, Adjust

With preset measures in place, the loop becomes an ongoing process:

1.     Review results against the expectations that were defined in advance.

2.     Flag deviations using alpha, Sharpe, drawdown, and capture ratios.

3.     Discuss root causes—intentional, structural, or concerning.

4.     Refine the investment process to avoid repeating the same shortcomings.

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This approach ensures that managers don’t just record results—they use them to refine their craft. The scorecard becomes the record of this process, creating continuity over multiple periods.

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Step 4: Apply the Feedback Loop Broadly

When applied consistently, appraisal measures—and the scorecards built around them—support more than internal evaluation. They can be used for:

·        Manager oversight: Boards and trustees see whether results matched stated goals.

·        Incentive design: Bonus structures tied to pre-defined risk-adjusted outcomes.

·        Governance and compliance: Demonstrating accountability with clear, documented processes.

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How Longs Peak Can Help

At Longs Peak, we help firms move beyond static reporting by building feedback loops rooted in performance appraisal. We:

·        Define meaningful performance and risk measures tailored to each strategy.

·        Help managers set pre-determined expectations for those measures and build them into a scorecard.

·        Calculate and interpret statistics such as alpha, Sharpe, drawdowns, and capture ratios.

·        Facilitate reflection sessions so results are compared to goals and lessons are turned into process improvements.

·        Provide governance support to ensure documentation and accountability.

The result is a sustainable process that keeps strategies aligned, disciplined, and credible.

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Closing Thought

Markets will always fluctuate. But firms that treat performance as a feedback loop—nota static report—build resilience, discipline, and trust.

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A well-structured scorecard ensures that performance data isn’t just about yesterday’s story. When used as feedback, it becomes a roadmap for tomorrow.

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Need help creating a Performance Scorecard? Reach out if you want us to help you create more accountability today!

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When you're responsible for overseeing the performance of an endowment or public pension fund, one of the most critical tools at your disposal is the benchmark. But not just any benchmark—a meaningful one, designed with intention and aligned with your Investment Policy Statement(IPS). Benchmarks aren’t just numbers to report alongside returns; they represent the performance your total fund should have delivered if your strategic targets were passively implemented.

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And yet, many asset owners still find themselves working with benchmarks that don’t quite match their objectives—either too generic, too simplified, or misaligned with how the total fund is structured. Let’s walkthrough how to build more effective benchmarks that reflect your IPS and support better performance oversight.

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Start with the Policy: Your IPS Should Guide Benchmark Construction

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Your IPS is more than a governance document—it is the road map that sets strategic asset allocation targets for the fund. Whether you're allocating 50% to public equity or 15% to private equity, each target signals an intentional risk/return decision. Your benchmark should be built to evaluate how well each segment of the total fund performed.

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The key is to assign a benchmark to each asset class and sub-asset class listed in your IPS. This allows for layered performance analysis—at the individual sub-asset class level (such as large cap public equity), at the broader asset class level (like total public equity), and ultimately rolled up at the Total Fund level. When benchmarks reflect the same weights and structure as the strategic targets in your IPS, you can assess how tactical shifts in weights and active management within each segment are adding or detracting value.

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Use Trusted Public Indexes for Liquid Assets

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For traditional, liquid assets—like public equities and fixed income—benchmarking is straightforward. Widely recognized indexes like the S&P 500, MSCI ACWI, or Bloomberg U.S. Aggregate Bond Index are generally appropriate and provide a reasonable passive alternative against which to measure active strategies managed using a similar pool of investments as the index.

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These benchmarks are also calculated using time-weighted returns (TWR), which strip out the impact of cash flows—ideal for evaluating manager skill. When each component of your total fund has a TWR-based benchmark, they can all be rolled up into a total fund benchmark with consistency and clarity.

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Think Beyond the Index for Private Markets

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Where benchmarking gets tricky is in illiquid or asset classes like private equity, real estate, or private credit. These don’t have public market indexes since they are private market investments, so you need a proxy that still supports a fair evaluation.

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Some organizations use a peer group as the benchmark, but another approach is to use an annualized public market index plus a premium. For example, you might use the 7-year annualized return of the Russell 2000(lagged by 3 months) plus a 3% premium to account for illiquidity and risk.

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Using the 7-year average rather than the current period return removes the public market volatility for the period that may not be as relevant for the private market comparison. The 3-month lag is used if your private asset valuations are updated when received rather than posted back to the valuation date. The purpose of the 3% premium (or whatever you decide is appropriate) is to account for the excess return you expect to receive from private investments above public markets to make the liquidity risk worthwhile.

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By building in this hurdle, you create a reasonable, transparent benchmark that enables your board to ask: Is our private markets portfolio delivering enough excess return to justify the added risk and reduced liquidity?

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Roll It All Up: Aggregated Benchmarks for Total Fund Oversight

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Once you have individual benchmarks for each segment of the total fund, the next step is to aggregate them—using the strategic asset allocation weights from your IPS—to form a custom blended total fund benchmark.

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This approach provides several advantages:

• You can evaluate performance at both the micro (asset class) and macro (total fund) level.
• You gain insight into where active management is adding value—and where it isn’t.
• You ensure alignment between your strategic policy decisions and how performance is being measured.

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For example, if your IPS targets 50% to public equities split among large-, mid-, and small-cap stocks, you can create a blended equity benchmark that reflects those sub-asset class allocations, and then roll it up into your total fund benchmark. Rebalancing of the blends should match there balancing frequency of the total fund.

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What If There's No Market Benchmark?

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In some cases, especially for highly customized or opportunistic strategies like hedge funds, there simply may not be a meaningful market index to use as a benchmark. In these cases, it is important to consider what hurdle would indicate success for this segment of the total fund. Examples of what some asset owners use include:

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• CPI + Premium – a simple inflation-based hurdle
• Absolute return targets – such as a flat 7% annually‍
• Total Fund return for the asset class – not helpful for evaluating the performance of this segment, but still useful for aggregation to create the total fund benchmark

While these aren’t perfect, they still serve an important function: they allow performance to be rolled into a total fund benchmark, even if the asset class itself is difficult to benchmark directly.

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The Bottom Line: Better Benchmarks, Better Oversight

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For public pension boards and endowment committees, benchmarks are essential for effective fiduciary oversight. A well-designed benchmark framework:

• Reflects your strategic intent
• Provides fair, consistent measurement of manager performance
• Supports clear communication with stakeholders

At Longs Peak Advisory Services, we’ve worked with asset owners around the globe to develop custom benchmarking frameworks that align with their policies and support meaningful performance evaluation. If you’re unsure whether your current benchmarks are doing your IPS justice, we’re hereto help you refine them.

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Want to dig deeper? Let’s talk about how to tailor a benchmark framework that’s right for your total fund—and your fiduciary responsibilities. Reach out to us today.

For asset owners and investment firms managing private equity, real estate, or other illiquid assets, one of the most persistent challenges in performance reporting is determining the right approach to valuation timing. Accurate performance results are essential, but delays in receiving valuations can create friction with timely reporting goals. How can firms strike the right balance?

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At Longs Peak Advisory Services, we’ve worked with hundreds of investment firms and asset owners globally to help them present meaningful, transparent performance results. When it comes to illiquid investments, the trade-offs and decisions surrounding valuation timing can have a significant impact—not just on performance accuracy, but also on how trustworthy and comparable the results appear to stakeholders.

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Why Valuation Timing Matters

Illiquid investments are inherently different from their liquid counterparts. While publicly traded securities can be valued in real-time with market prices, private equity and real estate investments often report with a delay—sometimes months after quarter-end.

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This delay creates a reporting dilemma: Should firms wait for final valuations to ensure accurate performance, or should they push ahead with estimates or lagged valuations to meet internal or external deadlines?

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It’s a familiar struggle for investment teams and performance professionals. On one hand, accuracy supports sound decision-making and stakeholder trust. On the other, reporting delays can hinder communication with boards, consultants, and beneficiaries—particularly for asset owners like endowments and public pension plans that follow strict reporting cycles.

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Common Approaches to Delayed Valuations

For strategies involving private equity, real estate, or other illiquid holdings, receiving valuations weeks—or even months—after quarter-end is the norm rather than the exception. To deal with this lag, investment organizations typically adopt one of two approaches to incorporate valuations into performance reporting: backdating valuations or lagging valuations. Each has benefits and drawbacks, and the choice between them often comes down to a trade-off between accuracy and timeliness.

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1. Backdating Valuations

In the backdating approach, once a valuation is received—say, a March 31 valuation that arrives in mid-June—it is recorded as of March 31, the actual valuation date. This ensures that performance reports reflect economic activity during the appropriate time period, regardless of when the data became available.

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Pros:

• Accuracy: Provides the most accurate snapshot of asset values and portfolio performance for the period being reported.
• Integrity: Maintains alignment between valuation dates and the underlying activity in the portfolio, which is particularly important for internal analysis or for investment committees wanting to evaluate manager decisions during specific market environments.

Cons:

• Delayed Reporting: Final performance for the quarter may be delayed by 4–6 weeks or more, depending on how long it takes to receive valuations.
• Stakeholder Frustration: Boards, consultants, and beneficiaries may grow  frustrated if they cannot access updated reports in a timely manner, especially if performance data is tied to compensation decisions, audit     deadlines, or public disclosures.

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When It's Useful:

• When transparency and accuracy are prioritized over speed—e.g., in annual audited performance reports or regulatory filings.
• For internal purposes where precise attribution and alignment with economic events are critical, such as evaluating decision-making during periods of market volatility.

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2. Lagged Valuations

With the lagged approach, firms recognize delayed valuations in the subsequent reporting period. Using the same example: if the March 31valuation is received in June, it is instead recorded as of June 30. In this case, the performance effect of the Q1 activity is pushed into Q2’sreporting.

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Pros:

• Faster Reporting: Performance reports can be completed shortly after quarter-end, meeting board, stakeholder, and regulatory timelines.
• Operational Efficiency: Teams aren’t held up by a few delayed valuations, allowing them to close the books and move on to other tasks.

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Cons:

• Reduced Accuracy: Performance reported for Q2 includes valuation changes that actually occurred in Q1, misaligning performance with the period in which it was earned.
• Misinterpretation Risk: If users are unaware of the lag, they may misattribute results to the wrong quarter, leading to flawed conclusions about manager skill or market behavior.

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When It's Useful:

• When quarterly reporting deadlines must be met (e.g., trustee meetings, consultant updates).
• In environments where consistency and speed are prioritized, and the lag can be adequately disclosed and understood by users.

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Choosing the Right Approach (and Sticking with It)

Both approaches are acceptable from a compliance and reporting perspective. However, the key lies in consistency.

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Once an organization adopts an approach—whether back dating or lagging—it should be applied across all periods, portfolios, and asset classes. Inconsistent application opens the door to performance manipulation(or the appearance of it), where results might look better simply because a valuation was timed differently.

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This kind of inconsistency can erode trust with boards, auditors and other stakeholders. Worse, it could raise red flags in a regulatory review or third-party verification.

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Disclose, Disclose, Disclose

Regardless of the method you use, full transparency in reporting is essential. If you’re lagging valuations by a quarter, clearly state that in your disclosures. If you change methodologies at any point—perhaps transitioning from lagged to backdated—explain when and why that change occurred.

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Clear disclosures help users of your reports—whether board members, beneficiaries, auditors, or consultants—understand how performance was calculated. It allows them to assess the results in context and make informed decisions based on the data.

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Aligning Benchmarks with Valuation Timing

One important detail that’s often overlooked: your benchmark data should follow the same valuation timing as your portfolio.

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If your private equity or real estate portfolio is lagged by a quarter, but your benchmark is not, your performance comparison becomes flawed. The timing mismatch can mislead stakeholders into believing the strategy outperformed or underperformed, simply due to misaligned reporting periods.

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To ensure a fair and meaningful comparison, always apply your valuation timing method consistently across both your portfolio and benchmark data.

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Building Trust Through Transparency

Valuation timing is a technical, often behind-the-scenes issue—but it plays a crucial role in how your investment results are perceived. Boards and stakeholders rely on accurate, timely, and understandable performance reporting to make decisions that impact beneficiaries, employees, and communities.

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By taking the time to document your valuation policy, apply it consistently, and disclose it clearly, you are reinforcing your organization’s commitment to integrity and transparency. And in a world where scrutiny of investment performance is only increasing, that commitment can be just as valuable as the numbers themselves.

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Need help defining your valuation timing policy or aligning performance reporting practices with industry standards?

‍Longs Peak Advisory Services specializes in helping investment firms and asset owners simplify their performance processes, maintain compliance, and build trust through transparent reporting. Contact us to learn how we can support your team.

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The Performance Measurement, Attribution & Risk (PMAR) Conference is always a highlight for investment performance professionals—and this year’s event did not disappoint. With a packed agenda spanning everything from economic uncertainty and automation to evolving training needs and private market complexities, PMAR 2025 gave attendees plenty to think about.

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Here are some of our key takeaways from this year’s event:

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Women in Performance Measurement (WiPM)

Although not officially a part of PMAR, WiPM often schedules its annual in-person gathering during the same week to take advantage of the broader industry presence at the event. This year’s in-person gathering, united female professionals from across the country for a full day of connection, learning, and mentorship. The agenda struck a thoughtful balance between professional development and personal connection, with standout sessions on AI and machine learning, resume building, and insights from the WiPM mentoring program. A consistent favorite among attendees is the interactive format—discussions are engaging, and the support among members is truly energizing. The day concluded with a cocktail reception and dinner, reinforcing the group’s strong sense of community and its ongoing commitment to advancing women in the performance measurement profession.

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If you’re not yet a member and are interested in joining the community, find WiPM here on LinkedIn.

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Uncertainty, Not Risk, is Driving Market Volatility

John Longo, Ph.D., Rutgers Business School kicked off the conference with a deep dive into the global economy, and his message was clear: today’s markets are more uncertain than risky. Tariffs, political volatility, and unconventional strategies—like the idea of purchasing Greenland—are reshaping global trade and investment decisions. His suggestion? Investors may want to look beyond U.S. borders and consider assets like gold or emerging markets as a hedge.

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Longo also highlighted the looming national debt problem and inflationary effects of protectionist policies. For performance professionals, the implication is clear: macro-level policy choices are creating noise that can obscure traditional risk metrics. Understanding the difference between risk and uncertainty is more important than ever.

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The Future of Training: Customized, Continuous, and Collaborative

In the “Developing Staff for Success” session, Frances Barney, CFA (former head of investment performance and risk analysis for BNY Mellon) and our very own Jocelyn Gilligan, CFA, CIPM explored the evolving nature of training in our field. The key message: cookie-cutter training doesn't cut it anymore. With increasing regulatory complexity and rapidly advancing technology, firms must invest in flexible, personalized learning programs.

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Whether it's improving communication skills, building tech proficiency, or embedding a culture of curiosity, the session emphasized that training must be more than a check-the-box activity. Ongoing mentorship, cross-training, and embracing neurodiversity in learning styles are all part of building high-performing, engaged teams.

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AI is Here—But It Needs a Human Co-Pilot

Several sessions explored the growing role of AI and automation in performance and reporting. The consensus? AI holds immense promise, but without strong data governance and human oversight, it’s not a silver bullet. From hallucinations in generative models to the ethical challenges of data usage, AI introduces new risks even as it streamlines workflows.

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Use cases presented ranged from anomaly detection and report generation to client communication enhancements and predictive exception handling. But again and again, speakers emphasized: AI should augment, not replace, human expertise.

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Private Markets Require Purpose-Built Tools

Private equity, private credit, real estate, and hedge funds remain among the trickiest asset classes to measure. Whether debating IRR vs. TWR, handling data lags, or selecting appropriate benchmarks, this year's sessions highlighted just how much nuance is involved in getting private market reporting right.

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One particularly compelling idea: using replicating portfolios of public assets to assess the risk and performance of illiquid investments. This approach offers more transparency and a better sense of underlying exposures, especially in the absence of timely valuations.

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Shorting and Leverage Complicate Performance Attribution

Calculating performance in long/short portfolios isn’t straightforward—and using absolute values can create misleading results. A session on this topic broke down the mechanics of short selling and explained why contribution-based return attribution is essential for accurate reporting.

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The key insight: portfolio-level returns can fall outside the range of individual asset returns, especially in leveraged portfolios. Understanding the directional nature of each position is crucial for both internal attribution and external communication.

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The SEC is Watching—Are You Ready?

Compliance was another hot topic, especially in light of recent enforcement actions under the SEC Marketing Rule. From misuse of hypothetical performance to sloppy use of testimonials, the panelists shared hard-earned lessons and emphasized the importance of documentation. This panel was moderated by Longs Peak’s Matt Deatherage, CFA, CIPM and included Lance Dial, of K&L Gates along with Thayne Gould from Vigilant.

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FAQs have helped clarify gray areas (especially around extracted performance and proximity of net vs. gross returns), but more guidance is expected—particularly on model fees and performance portability. If you're not already documenting every performance claim, now is the time to start.

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“Phantom Alpha” Is Real—And Preventable

David Spaulding of TSG, closed the conference with a deep dive into benchmark construction and the potential for “phantom alpha.” Even small differences in rebalancing frequency between portfolios and their benchmarks can create misleading outperformance. His recommendation? Either sync your rebalancing schedules or clearly disclose the differences.

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This session served as a great reminder that even small implementation details can significantly impact reported performance—and that transparency is essential to maintaining trust.

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Final Thoughts

From automation to attribution, PMAR 2025 showcased the depth and complexity of our field. If there’s one overarching takeaway, it’s that while tools and techniques continue to evolve, the core principles—transparency, accuracy, and accountability—remain as important a sever.

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Did you attend PMAR this year? We’d love to hear your biggest takeaways. Reach out to us at hello@longspeakadvisory.com or drop us a note on LinkedIn!

The investment management industry has spent significant time grappling with the SEC’s Marketing Rule and the question of whether gross-of-fee returns can be presented without corresponding net-of-fee returns in certain cases. Many firms have invested resources in trying to allocate fees to individual securities and sectors in an effort to comply. However, the SEC has now issued two FAQs (March 19, 2025) that provide much appreciated clarity on extracted performance and portfolio characteristics. The key takeaway? It is possible to present gross-of-fee returns without net-of-fee returns—if certain conditions are met.

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Extracted Performance: Gross Returns Can Stand Alone Under Specific Criteria

Investment advisers often present the performance of a single investment or a subset of a portfolio (“extracted performance”) in marketing materials. Historically, the SEC required both gross and net performance to be shown for such extracts. The new guidance provides a pathway for firms to display only gross-of-fee extracted performance, provided the following conditions are met:

1. The extracted performance must be clearly identified as gross performance.
2. The advertisement must also present the total portfolio’s gross and net performance in a manner consistent with SEC requirements.
3. The total portfolio’s performance must be given at least equal prominence to, and facilitate comparison with, the extracted performance.
4. The total portfolio’s performance must be calculated over a period that includes the entire period of the extracted performance.

If these conditions are satisfied, the SEC staff has indicated they will not recommend enforcement action, even if the extracted performance is presented without corresponding net returns. This is a notable shift, as it allows firms to avoid the complex and often impractical task of allocating fees at the investment or sector level.

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Portfolio and Investment Characteristics: Net-of-Fee Not Always Required

Another common industry question has been whether certain portfolio or investment characteristics—such as yield, volatility, Sharpe ratio, sector returns, or attribution analysis—constitute “performance” under the marketing rule, and if so, whether they must be presented net of fees.

The SEC’s latest guidance acknowledges that calculating these characteristics net of fees can be difficult and, in some cases, may lead to misleading results. As a result, the staff has confirmed that firms may present gross characteristics alone, without net characteristics, if they meet the following criteria:

1. The characteristic must be clearly identified as calculated without the deduction of fees and expenses.
2. The advertisement must also present the total portfolio’s gross and net performance in a manner consistent with SEC requirements.
3. The total portfolio’s performance must be given at least equal prominence to, and facilitate comparison with, the gross characteristic.
4. The total portfolio’s performance must be calculated over a period that includes the entire period of the characteristic being presented.

As with extracted performance, these conditions help ensure that the presentation is not misleading, reducing the risk of enforcement action.

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Bottom Line: A Practical Path Forward

This updated SEC guidance provides much-needed flexibility for investment managers, allowing for the presentation of gross-of-fee returns in a compliant manner. Firms that clearly disclose their approach and follow the specified conditions can reduce compliance burdens while still meeting investor protection standards. While this does not eliminate all complexities of the Marketing Rule, it does offer a practical solution that allows for more straightforward and meaningful performance reporting.

For firms navigating these changes, ensuring clear disclosures and maintaining compliance with the general prohibitions of the rule remains critical. Those who align their advertising materials with these guidelines can now confidently use gross-of-fee performance in a way that is both transparent and in compliance with regulatory requirements.

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Questions?

If you have questions about calculating or presenting investment performance in a manner that complies with regulatory requirements or industry best practices, we would love to talk to you. Please feel free to email us at hello@longspeakadvisory.com.

The Global Investment Performance Standards (GIPS®) have released a new Guidance Statement for OCIO Portfolios, bringing greater transparency and consistency to the way Outsourced Chief Investment Officers (OCIOs) report performance. This update is a significant milestone for firms managing OCIO Portfolios and asset owners looking to evaluate their OCIO providers.

What is an OCIO?

An Outsourced Chief Investment Officer (OCIO) is a third-party fiduciary that provides both strategic investment advice and investment management services to institutional investors such as pension funds, endowments, and foundations. Instead of building an in-house investment team, asset owners delegate investment decisions to an OCIO, which handles everything from strategic planning to portfolio management.

Who Does the New Guidance Apply To?

The Guidance Statement for OCIO Portfolios applies when a firm provides both:

1. Strategic investment advice, including developing or assessing an asset owner’s strategic asset allocation and investment policy statement.
2. Investment management services, such as portfolio construction, fund and manager selection, and ongoing management.

This ensures that firms managing OCIO Portfolios follow standardized performance reporting, making it easier for prospective clients to compare OCIO providers.

Who is Exempt from the OCIO Guidance?

The guidance does not apply in the following scenarios:

• Investment management without strategic advice – If a firm only manages investments without advising on asset allocation or investment policy.
• Strategic advice without investment management – If a firm provides recommendations but does not manage the portfolio.
• Partial OCIO portfolios – If a firm only manages a portion of a portfolio, rather than the full OCIO mandate.
• Retail client portfolios – The guidance is specific to institutional OCIO Portfolios and does not apply to retail investors including larger wealth management portfolios.

Key Change: Required OCIO Composites

Previously, OCIO firms had flexibility in defining their performance composites. Now, the GIPS Standards introduce Required OCIO Composites, which categorize portfolios based on strategic asset allocation.

Types of Required OCIO Composites

1. Liability-Focused Composites – Designed for portfolios aiming to meet specific liability streams, such as corporate pensions.
2. Total Return Composites – Focused on capital appreciation, commonly used by endowments and foundations.

Firms must classify OCIO Portfolios based on their strategic allocation, not short-term tactical shifts. This standardization enhances comparability across OCIO providers. The specific allocation ranges for the required composites are as follows:

Required OCIO Composites for OCIO Portfolios

Performance Calculation & Reporting

To ensure transparency, firms must follow specific rules for return calculations and fee disclosures:

• Time-weighted returns (TWR) are required, even for portfolios with private equity or real estate holdings.
• Both gross and net-of-fee returns must be presented to clarify the true cost of OCIO management.
• Fee schedule disclosures must include all investment management fees, including fees from proprietary funds and third-party placements.

Enhanced Transparency in GIPS Reports

The new guidance also requires OCIO firms to disclose additional portfolio details, such as:

• Annual asset allocation breakdowns (e.g., growth vs. liability-hedging assets).
• Private market investment and hedge fund exposures.
• Portfolio characteristics, such as funding ratios and duration for liability-focused portfolios.

By providing these details, OCIO firms enable prospective clients to make better-informed decisions when selecting an investment partner.

When Do These Changes Take Effect?

The Guidance Statement for OCIO Portfolios is effective December 31, 2025. From this date forward, GIPS Reports for Required OCIO Composites must follow the new standards. However, firms are encouraged to adopt the guidance earlier to improve transparency and reporting consistency.

Why This Matters

With OCIO services growing in popularity, this new guidance ensures that firms adhere to best practices in performance reporting. By establishing clear rules for composite classification, return calculation, and fee disclosure, the guidance empowers asset owners to compare OCIO providers with confidence.

As the December 31, 2025 deadline approaches, OCIO firms should begin aligning their reporting practices with this new guidance to stay ahead of the curve.

Don’t miss CFA Institute’s webinar scheduled for this Thursday February 6, 2025 to hear more on this guidance statement.

Questions?

If you have questions about the Guidance Statement for OCIO Portfolios or the Standards in general, we would love to talk to you. Longs Peak’s professionals have extensive experience helping firms become GIPS compliant as well as helping firms maintain their compliance with the GIPS Standards on an ongoing basis. Please feel free to email us at hello@longspeakadvisory.com.

Achieving compliance with the Global Investment Performance Standards (GIPS®) is a powerful way to demonstrate commitment to transparency and best practices in investment performance reporting. But is it always easy? Recently, we’ve heard several institutions, particularly in regions with limited compliance, express concerns that adhering to the standards would be challenging due to conflicting local laws and regulations.

Although local regulations can sometimes differ from the GIPS standards, we have found that direct conflicts with the GIPS standards tend to be rare. The GIPS standards were designed with a global framework in mind, enabling prioritization of stricter local laws and management of potential conflicts transparently.

The GIPS Compliance Framework

To achieve GIPS compliance while adhering to local regulations, firms and asset owners must understand how the GIPS standards prioritizes regulatory alignment. The guidance stresses adherence to the stricter of the two standards:

• If local laws impose stricter rules than the GIPS standards, firms should follow local laws.
• If the GIPS standards are stricter than local regulations, firms must adhere to the GIPS standards.
• In situations where direct conflicts arise between local regulations and the GIPS standards, local law takes precedence.

Again, direct conflicts tend to be rare. Most often we see situations where the GIPS standards may be stricter than the local law or vise versa.  We have provided some examples in the sections that follow to help demonstrate how you might handle either situation.

Managing Conflicts Between the GIPS Standards & Local Regulations

Key principle: GIPS compliance can be maintained while respecting local regulations. When differences or conflicts occur, firms can continue to claim GIPS compliance by carefully disclosing deviations required by local regulations. This ensures transparency and maintains the integrity of performance reporting.

The first step for institutions is to identify any inconsistencies between the GIPS standards and their local regulatory requirements. If local laws prevent compliance with certain provisions of the GIPS standards, firms should:

1. Follow the local laws and regulations.
2. Document and disclose any necessary deviations from the GIPS standards in their GIPS reports, including:
   • A clear description of the conflict.
   • Specific details on how compliance was adjusted to adhere to local regulations.

Direct conflicts with the GIPS standards must be disclosed transparently in GIPS reports to ensure stakeholders understand the nature and impact of modifications made to meet local requirements. This commitment to openness preserves the credibility of the firm’s compliance efforts.

Practical Example 1: Stricter SEC Requirements and GIPS Compliance

A relevant example where a local law is more strict includes the SEC’s marketing rule for firms registered in the United States. The SEC requires net-of-fee performance reporting, which is stricter than the GIPS standards allowance for either gross-of-fee or net-of-fee returns. For firms registered with the SEC, this means including net-of-fee returns in GIPS reports. Although additional disclosure in this case may not be required, it illustrates how firms can remain GIPS compliant by adhering to the GIPS standards and also the stricter local rule.

Practical Example 2: Conflicting Local Requirement & Disclosure

The GIPS Handbook (see page 256) provides an example of a conflict where the local law prohibits the presentation of returns for periods less than one year to prospective clients. In this scenario, the GIPS standards requires disclosure of the conflict and an explanation for the manner in which the local laws or regulations conflict with the GIPS standards. The following sample disclosure language is provided:

"Local laws do not allow the presentation of returns of less than one year to prospective clients, which is in conflict with the GIPS standards. Therefore, no performance is presented for this composite for the period from 1 July 2018 (the inception date of the composite) through 31 December 2018."

Global Applicability of the GIPS Standards

The GIPS standards were developed with the flexibility needed for global adoption, enabling firms worldwide to achieve compliance while respecting local regulatory environments. By following all the requirements of the GIPS standards, identifying conflicts with local laws, and disclosing deviations where necessary, firms can ensure they uphold both local and global standards for performance reporting. This means that even for firms concerned about these conflicts, compliance with the standards is achievable.

Next Steps for Investment Managers

If you would like to be among the group of investment firms or asset owners claiming GIPS compliance and upholding the highest standard for investment performance reporting then please consider the following actions:

1. Conduct a thorough review of local regulations to identify any inconsistencies with the GIPS standards.
2. Document potential conflicts and stricter local requirements.
3. Develop clear disclosures for any necessary deviations to comply with local laws.
4. Ensure that GIPS reports transparently reflect adherence to both local laws and the GIPS standards.
5. Seek expert guidance to navigate complex regulatory intersections.
6. Regularly review and update compliance strategies as regulations evolve.

Achieving GIPS compliance is possible, even when local regulations do not perfectly align. With careful planning, transparent disclosure, and a commitment to upholding the highest standards, it is possible to comply with the GIPS standards no matter where you’re located. Reach out to Longs Peak if you would like help getting started.

GIPS® is a registered trademark owned by CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.