BUSINESS SITUATION
- The client wanted to organize its performance reporting practice by developing a policy statement document and composites based on actively managed strategies.
- The client intended to appear for the GIPS compliance review, which would enhance credibility and aid future marketing efforts.
- The client was assessing deployment of a composite management tool. However, creating composites and generating customized reports proved to be a challenge. The client wanted a more easy-to-use and flexible solution.
SGA APPROACH
- Deployed one analyst to co-ordinate with and support the client in the GIPS journey by comprehending guidelines, identifying gaps in the firm’s existing policies, analyzing broker trade reports, and making returns calculations.
- Understood the firm’s client contracts, created policy statements, and considered mix fee structures, which were used as inputs for the composites’ returns calculations.
- Based on individual strategies, the composites were created using mandated accounts, which met inclusion criteria and relevant benchmarks.
- Presented the measure of internal dispersion using standard deviation of individual portfolio annual returns.
ENGAGEMENT
A dedicated analyst support in the preparation for GIPS compliance through in-depth analysis of the firm’s existing policy documents, strategies, fee arrangements, payment mechanisms and portfolio-level trades.
BENEFITS AND OUTCOMES
- The client managed to clear the GIPS compliance review process with only minor suggestions during the review.
- The renewed performance reporting mechanism also met the local regulator’s review requirements.
- The client was able to conveniently track and report performance on a periodic basis.
KEY TAKEAWAYS
- Prepared a policies and procedures document, composites, and customized reports for active strategies within 2 months.
- Provided support at ~35% lower costs as compared to onshore GIPS consultants.
- A big thank you for your diligent work on GIPS. We are verified!” (client’s e-mail post verification).
