Resources

Does the New SEC FAQ Impact Your Fund Calculations?

In February, the SEC published another Q&A pertaining to the 2022 marketing rule.  For CCOs working with private funds at firms that don’t claim compliance with the GIPS Standards, you’ll want to check the performance calculation input for the start date of the IRR and make certain the same date is used for both gross and net performance. 
February 29, 2024/by Kim Cash

SEC Marketing Rule – Hypothetical & Extracted Performance

Hypothetical performance will be prohibited beginning November 4, 2022, unless the advisor takes specific steps to address its potentially misleading nature. The SEC’s goal with this portion of the rule is to ensure that advertisements containing hypothetical performance are only distributed to investors who have the financial expertise and resources to interpret the data and understand the risks and limitations of these types of presentations.
July 26, 2022/by Kim Cash

SEC Portability Predecessor Performance

A portfolio manager’s track record is an important asset and key pillar of evaluation by institutional investors/asset owners.  Ensuring that a portfolio manager’s performance can—or whether it should—go with her/him/the team to a new firm is of critical concern for planning or evaluating any transition.
February 23, 2022/by Kim Cash

Money-Weighted Returns in Excel

Beyond “Don’t Use” – How (Not) to Calculate Money-Weighted Returns in Excel

If cost was of no matter, then asset managers would all own (fill in the blank with your favorite accounting system).  For emerging asset management firms, cost does matter.  When managing a start-up commingled fund, an investment firm only needs to calculate a single return stream to comply with best practices in the GIPS® standards.  It’s hard to justify a six-figure expense when Microsoft Excel is free, never mind the pitfalls.
November 13, 2018/by Kim Cash