In an increasingly competitive investment landscape, asset managers are under growing pressure to demonstrate not only strong performance, but also trustworthy and benchmarked results. This is where Global Investment Performance Standards (GIPS®) play a critical role. Far more than a reporting framework, GIPS compliance has become a strategic advantage; GIPS helps asset managers strengthen credibility, improve investor confidence, and clearly articulate the value of their investment strategies.
What Are the GIPS Standards?
The GIPS standards, developed by the CFA Institute, are a set of ethical principles and standardized reporting requirements that guide investment firms in calculating and presenting performance results. They ensure consistency, transparency, and fairness—key elements in effective performance marketing and due diligence.
But their importance goes well beyond performance numbers.
Enhancing Credibility and Investor Trust
Investors want confidence that an asset manager’s performance track record is accurate, complete, and consistent. GIPS compliance provides that assurance.
By adhering to rigorous global standards, asset managers signal that they prioritize integrity and accountability in performance reporting. This credibility is particularly valuable when competing for institutional mandates, where GIPS compliance is often a minimum expectation.
Bottom line: GIPS compliance helps transform raw performance figures into trustworthy representations of strategy effectiveness.
Supporting Clear Communication of Investment Strategy
GIPS-compliant reporting requires detailed disclosures that help investors understand the investment strategy used, the universe of accounts included, the risks and constraints of the composite, the relevant benchmark and rationale, and the historical consistency of the investment process.
This added transparency gives context to performance results, making it easier for prospects to understand how an asset manager’s strategy operates. That context is especially critical for complex strategies—such as alternatives, multi-asset, and active risk-managed approaches—where misunderstanding can become a barrier to understanding the strategy.
In short, GIPS helps asset managers clearly and consistently articulate how their process drives results.
Enabling Meaningful Comparisons
Consistency is one of the biggest challenges in performance evaluation. Different firms use different methodologies, calculation periods, and reporting practices, making apples-to-apples analysis difficult. GIPS standards solve this problem by enforcing uniformity in key areas such as return calculation methods, historical composite construction, benchmark selection, and risk reporting.
For investors performing manager due diligence, this consistency dramatically simplifies evaluation. For asset managers, improved comparability means their strategy can be evaluated on merit rather than on differences in reporting methods.
Strengthening and Marketing the Investment Story
An investment strategy needs a compelling performance story. GIPS compliance strengthens that story by providing a reliable historical record, proof of disciplined process, verified composite construction, and transparency around how results were achieved.
Sales and marketing teams often rely on this structure when presenting to institutional investors and their consultants. Many RFPs require GIPS-compliant performance as a prerequisite for inclusion. As a result, asset managers with GIPS-compliant performance gain clearer, stronger, and more credible messaging around their strategy’s value proposition.
Improving Operational Discipline and Risk Management
Beyond marketing, GIPS compliance improves internal practices by providing:
- Better performance data governance
- Increased oversight of composite maintenance
- More accurate account classification
- Stronger internal controls and documentation
- Greater alignment between investment, operations, and compliance teams
These improvements foster operational efficiency and help mitigate reputational and regulatory risk, both essential to the execution of their strategy.
Supporting Global Competitiveness
Because the GIPS standards are recognized worldwide, compliance enables firms to market strategies across borders with a consistent, trusted performance framework. For asset managers expanding into new channels and regions, GIPS provides a powerful foundation for global credibility.
Conclusion: GIPS Compliance Is a Strategic Asset
GIPS compliance is no longer just a best practice—it’s a core component of a successful investment strategy. By enhancing transparency, supporting operational excellence, and strengthening investor trust, GIPS-compliant performance gives asset managers a competitive edge in both marketing and execution.
One solution is Ultimus’ flexible middle office solution, which can assist firms with their data and performance needs by providing outsourced, technology-driven operational support. Our model provides asset managers with end-to-end solutions for IBOR and fund accounting, and is fully integrated with our middle office operational and GIPS performance services.
To find out more about our middle office solutions, contact us today.
COD00000934 12/12/2025
