Investment managers can managetheir users’ need to receive a historical performance track record in several ways. The most straight-forward way to do this is to prepare a summary of the investment manager’s historical performance verified by an independent accountant.

The performance record will include the independent accountant’s report, the performance track record summarized in tabular format and supporting notes to provide a description of the return calculation methodology and other information pertaining to the investment manager or account owner that may be relevant to the potential investors. 

Alternatively, an investment manager may choose to prepare a Global InvestmentPerformance Standards (GIPS) report. GIPS area “set of standardized, industry wide ethical principles that guide investment firms on how to calculate and report their investment resultsto prospective clients.”

A GIPS report typically consists of:

1. a statement that the organization is in compliance with GIPS and that the report has been prepared in compliance with GIPS standards;
2. a summary of the firm’s returns for at least five years (or since inception, if shorter);
3. definitions of the “firm” and“composites” for which the returns are calculated; 
4. a description of the period(s) for which the returns have been calculated;
5. a description of the firm’s valuation and accounting policies; and 
6. a summary of fees and its benchmarks.

How can KPMG can help

KPMG can perform a number of services for investment managers seeking performance track record verification. These include:

• providing attestation services on historical performance track records (non-GIPS compliant);
• assisting investment managers with the initial implementation and compliance with GIPS and
• providing verification services overcompliance with GIPS.