Tips and tricks for GIPS

finaly reached study session 18: GIPS.

Does anyone has any tips and tricks how to cram this into your head?

Yes. Don’t read the curriculum or Schweser for this study session. Just read the actual GIPS standards instead.

I built a timeline with all of the requirements listed by their inception date

I wrote everything out in shorthand, the notes tend to repeat themselves a lot. So just try and learn the key concepts, and the changes to the standards. It took me a couple of hours to condense it into 3 pages, but it was worth the effort. I am going to listen to the lectures to and from work in May.

I received a request to post the timeline I created. It’s not perfect (feel free to make corrections) just an AF contribution:

GIPS Timeline


-No Post Jan 1, 2000 non-compliant performance linked with compliant performance, can link pre-2000 but must explain how non-compliant


-Before Jan1, Portfolios must be valued quarterly, after monthly


-Jan 1, Must use trade date accounting and accrued date for fixed income

-Jan 1, Must adjust approximated rates of return for daily weighted cash flows

-Jan1, Original Dietz method permitted until 2005, after must be a method that adjusts for daily cash flows such as the Modified Dietz or the Modified IRR


-Beginning Jan 1, Wrap Fee/SMA guidelines apply and for periods after this date, firms must not link their non-compliant GIPS performance to their GIPS-compliant Wrap Fee/SMA performance

-All composites must have same beginning and ending annual dates

-Composite returns must be asset weighted, use beginning of period values, and be calculated quarterly

-Jan 1 must disclose the use of subadvisors and periods

-The proportion of a single asset class composite that is made up of carve outs


-Real Estate must be valued at least quarterly


-Jan 1, must value all portfolios on the date of all large external cash flows and on calendar month end using a Time Weighted Rate of Return

-Jan1, No single asset class carve outs unless the segment is managed separately with its own cash balance

-Composite returns must be calculated monthly

-Just like for Private Equity, for Real Estate, firms must calculate the SI-IRR


-Jan 1, All portfolios must be valued according to fair value

-Jan 1, Must Present the 3 year standard deviation of composite and benchmark returns

-Jan 1, Real Estate must be valued according to fair value

-Jan 1, Private Equity must be valued at fair value and the annualized SI-IRR must be calculated using daily cash flows

-Jan 1, After Tax performance reporting will be supplemental to a compliant presentation

-Jan1, Must present net of fees SI-IRR through end of the initial annual period (less than a year) or through the composite’s final liquidation date

-Real Estate, income returns and capital returns must be calculated separately using geometrically linked time-weighted rates of return


-Jan 1, Real Estate must be valued by a licensed appraiser at least 1 time every 36 months prior to 2012 and at least annually after