Key Takeaways from the 2020 GIPS® Standards Virtual Conference

Sean P. Gilligan, CFA, CPA, CIPM
Managing Partner
November 11, 2020
15 min
Key Takeaways from the 2020 GIPS® Standards Virtual Conference

The week of October 26th, CFA Institute hosted the 24th annual GIPS Conference. It was the first of its kind, with speakers presenting virtually from the comfort of their own homes and offices.

Most of this year’s conference was focused on compliance with the 2020 GIPS standards, as well as important discussions around US-specific (SEC) regulatory compliance and ESG performance. Below are some key takeaways from this three-day event.

Specific Takeaways Relating to GIPS Compliance

The 2020 GIPS standards were released at the end of June 2019, so the industry has had some time to absorb the updates that were made. All changes firms are required to make must be completed before presenting performance for periods including 31 December 2020 in the firm’s GIPS Reports.

With the end of 2020 fast approaching, the conversion to the 2020 standards was the focus of this year’s conference. We have previously published information relating to converting your GIPS Reports and Policies and Procedures for GIPS 2020 so we will not repeat that all here, but below are some of the key points that were emphasized during the conference:

Broad vs. Limited Distribution Pooled Funds

The treatment of pooled funds is one of the most significant changes made to the GIPS standards for 2020. Since the requirements for how pooled funds are treated differ depending on whether they are classified as Broad Distribution Pooled Funds (“BDPF”) or Limited Distribution Pooled Funds (“LDPF”), the speakers emphasized how to distinguish between the two.

Pooled funds are different than segregated accounts in that their ownership interests may be held by more than one investor. A BDPF is regulated in a way that permits the general public to purchase or hold the fund’s shares, and this type of pooled fund is not exclusively offered in one-on-one presentations. On the other hand, a LDPF is any pooled fund that does not fit into the category of a BDPF.

The classification between the two types of pooled funds is made at the fund level rather than the share class level. Some common examples of BDPFs include pooled funds with at least one retail share class and pooled funds with shares traded on an exchange. The most common BDPFs in the U.S. are mutual funds. LDPFs include any pooled fund that a firm offers exclusively in one-on-one presentations.

The distinction between the types of pooled funds is important because there are different requirements that need to be met depending on whether the fund is a BDPF or LDPF. Specifically, firms are not required to provide a GIPS Report to BDPF prospective investors, but they must make every reasonable effort to provide a GIPS Report to all LDPF prospective investors when they initially become a prospect and every twelve months thereafter for as long as they remain a prospective investor.

The GIPS Report provided to LDPF prospective investors can be either a GIPS Pooled Fund Report or a GIPS Composite Report for the composite in which the LDPF is included. Regardless of which is provided, the report must disclose the fees specific to the fund including the fund’s total expense ratio. Firms choosing not to create a separate GIPS Pooled Fund Report may wish to maintain multiple versions of their GIPS Composite Report so a version with pooled fund fees can be provided to prospective pooled fund investors and a version with just management fees can be provided to prospective segregated account clients.

Firms Must Gain an Understanding of their Verifier’s Policies for Maintaining Independence

Independence is an important topic relating to GIPS verification. Ensuring that verifiers do not step into a management role, set policies, calculate returns, etc. is essential for the verification to be meaningful. Only when the verifier remains independent will the verification letter truly represent the opinion of an unbiased third-party.

Firms are not required to be verified but investing in verification brings additional credibility to a firm's claim of compliance. At the GIPS Conference, the speakers emphasized that under the 2020 GIPS standards, if a firm chooses to be verified it must:

  1. Gain an understanding of the verifier’s policies for maintaining independence.
  2. Consider the verifier’s assessment of independence.

This is an ongoing process, and these steps must be performed with each verification engagement. To properly adhere to these requirements, firms should obtain a summary of the verifier’s policies for ensuring independence and have sufficient discussions with the verifier to understand the policies and identify any conflicts of interest.

When issues come up that require the help of GIPS expert, utilizing the help of an independent GIPS consultant, such as Longs Peak, rather than the firm’s verifier helps ensure the verifier’s independence is not jeopardized.

Requirement to Maintain a GIPS Report Distribution Log

Firms have always been required to make every reasonable effort to distribute GIPS Reports to prospects; however, under the 2020 GIPS standards, firms are now also required to demonstrate their effort to do so.

The speakers at the conference emphasized that not only is it now required to demonstrate this effort, but verifiers will be testing this. This means that firms should track the distribution in a manner that can be easily converted into a report to provide to their verifier. There is no specific requirement as to how this is tracked, but the most common is to log the relevant information into a CRM database or in a spreadsheet if a CRM is not used.

Next Steps for CFA Institute

CFA Institute is constantly updating their resources related to the GIPS standards and will continue to do so. During the conference, a list of “next steps” was discussed.

  1. The Q&A Database will be updated to ensure the current Q&As are relevant to the 2020 standards. Q&As that are no longer relevant will be archived.
  2. Existing Guidance Statements will be updated to ensure they adhere to the 2020 standards.
  3. CFA Institute is in the process of finalizing exposure draft Guidance Statements related to benchmarks, overlay strategies, risk, and supplemental information.
  4. The creation of tools and resources to assist with implementation of the 2020 edition of the GIPS standards will continue. Updates on new tools/resources will be posted on the CFA Institute website as well as announced in monthly emails. To subscribe to the GIPS standards newsletter please follow instructions here.

Regulatory (SEC) Compliance Takeaways

The SEC's Proposed New Advertising Rule

The main focus of the SEC compliance portion of the conference was to discuss the proposed new Advertising Rule. The new Advertising Rule should be finalized in the next couple months, and firms will have one year to comply once it is finalized.

Historically, firms have relied on “No-Action Letters” and other interpretive guidance to ensure advertisements do not violate SEC requirements. The new Advertising Rule is expected to consolidate this miscellaneous guidance into a set of principles-based provisions with an overarching emphasis on ensuring advertisements are fair and balanced.

Some of the key elements of the proposed new Advertising Rule are below.

  • As proposed, the definition of “advertisement” will be broadened to include “any communication, disseminated by any means, by or on behalf of an investment adviser, that offers or promotes the investment adviser’s investment advisory services or that seeks to obtain or retain one or more investment advisory clients or investors in any pooled fund vehicle advised by the investment adviser.” While there will be certain exclusions, this essentially broadens the definition to include all promotional emails, text messages, and any pre-recorded podcasts. It also makes the firm responsible for ensuring that any third-party content promoting advisory services on behalf of the firm also adheres to the Advertising Rule.
  • The proposed rule prohibits advertisements from including performance results from fewer than all portfolios with substantially similar investment policies, procedures, objectives, and strategies, with limited exceptions. This better aligns the SEC rules with the GIPS standards, as it moves firms towards composite construction rather than using representative accounts. There do appear to be exceptions to the rule where representative accounts could be used as long as the return of the representative account is no higher than the average return of all portfolios managed with the same strategy; however, this could be difficult to support without calculating the composite returns. We expect that composite returns will become the norm, even for firms not complying with the GIPS standards.
  • The new rule also emphasizes the requirement of pre-use review and approval of all advertisements prior to dissemination. This review and approval can be designated to one or more employees with the competence and knowledge regarding the requirements, and the designated employee(s) should generally include legal or compliance personnel. Exclusions from this rule would include live oral communications that are not widely broadcast and communications disseminated only to a single person or household or to a single investor in a pooled fund vehicle.

Once this new Advertising Rule is finalized, advisers can use the one-year transition period to develop and adopt appropriate policies and procedures to comply with the new rule. Since the new rule is not yet finalized, no immediate action is required at this time other than starting to consider what changes will likely be necessary for your firm.

ESG Takeaways

As ESG-based investing has become increasingly popular, the GIPS Conference included a session discussing ESG performance attribution. Environmental, Social, and Governance (“ESG”) refers to three of the main factors in measuring the sustainability and societal impact of an investment. Measuring ESG essentially refers to measuring how much of an investment’s performance can be attributed to ESG considerations in the investment process.

Sources of ESG Data

ESG data has evolved over time, and there are multiple categories of sources. The main sources used historically are Corporate Governance Disclosures as well as news and media sources. A very systematic quality control process of evaluating ESG data needs to be in place to properly interpret the data.

Some of the sources that are becoming increasingly available are alternative data sources, such as government regulatory agency databases and models for ESG metrics. Data from alternative sources requires expertise to extract and properly shape in order for the data to be useful.

Materiality of ESG Data

ESG data is generally not very uniform or standardized, and there are biases that exist across the various sources. Discussions during the ESG portion of the conference compared the current state of ESG data to financial data of the past. There was a period of time when financial data was in this “messy” state before reporting standards were put in place and the process of unifying global financial data was undertaken. ESG data is expected to follow a similar path.

Zeroing in on what is material and what factors matter while evaluating a company is an important part of the investment process. There are many factors to consider while assessing ESG inputs, but determining the key factors relevant to any given business model is essential.

Conclusion

Overall, the GIPS Conference was a success despite not being able to meet in person. The networking is always a fun and important aspect of the conference, but the virtual conference still was able to provide useful practical tips for implementing the 2020 GIPS standards as well as other related performance topics.

If you have any questions about the GIPS Conference or GIPS and performance in general, please feel free to contact us.

Recommended Post

View All Articles
Valuation Timing for Illiquid Investments
Explore how firms & asset owners can balance accuracy & timeliness in performance reporting for illiquid investments.
June 23, 2025
15 min

For asset owners and investment firms managing private equity, real estate, or other illiquid assets, one of the most persistent challenges in performance reporting is determining the right approach to valuation timing. Accurate performance results are essential, but delays in receiving valuations can create friction with timely reporting goals. How can firms strike the right balance?

At Longs Peak Advisory Services, we’ve worked with hundreds of investment firms and asset owners globally to help them present meaningful, transparent performance results. When it comes to illiquid investments, the trade-offs and decisions surrounding valuation timing can have a significant impact—not just on performance accuracy, but also on how trustworthy and comparable the results appear to stakeholders.

Why Valuation Timing Matters

Illiquid investments are inherently different from their liquid counterparts. While publicly traded securities can be valued in real-time with market prices, private equity and real estate investments often report with a delay—sometimes months after quarter-end.

This delay creates a reporting dilemma: Should firms wait for final valuations to ensure accurate performance, or should they push ahead with estimates or lagged valuations to meet internal or external deadlines?

It’s a familiar struggle for investment teams and performance professionals. On one hand, accuracy supports sound decision-making and stakeholder trust. On the other, reporting delays can hinder communication with boards, consultants, and beneficiaries—particularly for asset owners like endowments and public pension plans that follow strict reporting cycles.

Common Approaches to Delayed Valuations

For strategies involving private equity, real estate, or other illiquid holdings, receiving valuations weeks—or even months—after quarter-end is the norm rather than the exception. To deal with this lag, investment organizations typically adopt one of two approaches to incorporate valuations into performance reporting: backdating valuations or lagging valuations. Each has benefits and drawbacks, and the choice between them often comes down to a trade-off between accuracy and timeliness.

1. Backdating Valuations

In the backdating approach, once a valuation is received—say, a March 31 valuation that arrives in mid-June—it is recorded as of March 31, the actual valuation date. This ensures that performance reports reflect economic activity during the appropriate time period, regardless of when the data became available.

Pros:
  • Accuracy: Provides the most accurate snapshot of asset values and portfolio performance for the period being reported.
  • Integrity: Maintains alignment between valuation dates and the underlying activity in the portfolio, which is particularly important for internal analysis or for investment committees wanting to evaluate manager decisions during specific market environments.
Cons:
  • Delayed Reporting: Final performance for the quarter may be delayed by 4–6 weeks or more, depending on how long it takes to receive valuations.
  • Stakeholder Frustration: Boards, consultants, and beneficiaries may grow  frustrated if they cannot access updated reports in a timely manner, especially if performance data is tied to compensation decisions, audit     deadlines, or public disclosures.

When It's Useful:
  • When transparency and accuracy are prioritized over speed—e.g., in annual audited performance reports or regulatory filings.
  • For internal purposes where precise attribution and alignment with economic events are critical, such as evaluating decision-making during periods of market volatility.

2. Lagged Valuations

With the lagged approach, firms recognize delayed valuations in the subsequent reporting period. Using the same example: if the March 31valuation is received in June, it is instead recorded as of June 30. In this case, the performance effect of the Q1 activity is pushed into Q2’sreporting.

Pros:
  • Faster Reporting: Performance reports can be completed shortly after quarter-end, meeting board, stakeholder, and regulatory timelines.
  • Operational Efficiency: Teams aren’t held up by a few delayed valuations, allowing them to close the books and move on to other tasks.

Cons:
  • Reduced Accuracy: Performance reported for Q2 includes valuation changes that actually occurred in Q1, misaligning performance with the period in which it was earned.
  • Misinterpretation Risk: If users are unaware of the lag, they may misattribute results to the wrong quarter, leading to flawed conclusions about manager skill or market behavior.

When It's Useful:
  • When quarterly reporting deadlines must be met (e.g., trustee meetings, consultant updates).
  • In environments where consistency and speed are prioritized, and the lag can be adequately disclosed and understood by users.

Choosing the Right Approach (and Sticking with It)

Both approaches are acceptable from a compliance and reporting perspective. However, the key lies in consistency.

Once an organization adopts an approach—whether back dating or lagging—it should be applied across all periods, portfolios, and asset classes. Inconsistent application opens the door to performance manipulation(or the appearance of it), where results might look better simply because a valuation was timed differently.

This kind of inconsistency can erode trust with boards, auditors and other stakeholders. Worse, it could raise red flags in a regulatory review or third-party verification.

Disclose, Disclose, Disclose

Regardless of the method you use, full transparency in reporting is essential. If you’re lagging valuations by a quarter, clearly state that in your disclosures. If you change methodologies at any point—perhaps transitioning from lagged to backdated—explain when and why that change occurred.

Clear disclosures help users of your reports—whether board members, beneficiaries, auditors, or consultants—understand how performance was calculated. It allows them to assess the results in context and make informed decisions based on the data.

Aligning Benchmarks with Valuation Timing

One important detail that’s often overlooked: your benchmark data should follow the same valuation timing as your portfolio.

If your private equity or real estate portfolio is lagged by a quarter, but your benchmark is not, your performance comparison becomes flawed. The timing mismatch can mislead stakeholders into believing the strategy outperformed or underperformed, simply due to misaligned reporting periods.

To ensure a fair and meaningful comparison, always apply your valuation timing method consistently across both your portfolio and benchmark data.

Building Trust Through Transparency

Valuation timing is a technical, often behind-the-scenes issue—but it plays a crucial role in how your investment results are perceived. Boards and stakeholders rely on accurate, timely, and understandable performance reporting to make decisions that impact beneficiaries, employees, and communities.

By taking the time to document your valuation policy, apply it consistently, and disclose it clearly, you are reinforcing your organization’s commitment to integrity and transparency. And in a world where scrutiny of investment performance is only increasing, that commitment can be just as valuable as the numbers themselves.

Need help defining your valuation timing policy or aligning performance reporting practices with industry standards?

Longs Peak Advisory Services specializes in helping investment firms and asset owners simplify their performance processes, maintain compliance, and build trust through transparent reporting. Contact us to learn how we can support your team.

Key Takeaways from the 2025 PMAR Conference
This year’s PMAR Conference delivered timely and thought-provoking content for performance professionals across the industry. In this post, we’ve highlighted our top takeaways from the event—including a recap of the WiPM gathering.
May 29, 2025
15 min

The Performance Measurement, Attribution & Risk (PMAR) Conference is always a highlight for investment performance professionals—and this year’s event did not disappoint. With a packed agenda spanning everything from economic uncertainty and automation to evolving training needs and private market complexities, PMAR 2025 gave attendees plenty to think about.

Here are some of our key takeaways from this year’s event:

Women in Performance Measurement (WiPM)

Although not officially a part of PMAR, WiPM often schedules its annual in-person gathering during the same week to take advantage of the broader industry presence at the event. This year’s in-person gathering, united female professionals from across the country for a full day of connection, learning, and mentorship. The agenda struck a thoughtful balance between professional development and personal connection, with standout sessions on AI and machine learning, resume building, and insights from the WiPM mentoring program. A consistent favorite among attendees is the interactive format—discussions are engaging, and the support among members is truly energizing. The day concluded with a cocktail reception and dinner, reinforcing the group’s strong sense of community and its ongoing commitment to advancing women in the performance measurement profession.

If you’re not yet a member and are interested in joining the community, find WiPM here on LinkedIn.

Uncertainty, Not Risk, is Driving Market Volatility

John Longo, Ph.D., Rutgers Business School kicked off the conference with a deep dive into the global economy, and his message was clear: today’s markets are more uncertain than risky. Tariffs, political volatility, and unconventional strategies—like the idea of purchasing Greenland—are reshaping global trade and investment decisions. His suggestion? Investors may want to look beyond U.S. borders and consider assets like gold or emerging markets as a hedge.

Longo also highlighted the looming national debt problem and inflationary effects of protectionist policies. For performance professionals, the implication is clear: macro-level policy choices are creating noise that can obscure traditional risk metrics. Understanding the difference between risk and uncertainty is more important than ever.

The Future of Training: Customized, Continuous, and Collaborative

In the “Developing Staff for Success” session, Frances Barney, CFA (former head of investment performance and risk analysis for BNY Mellon) and our very own Jocelyn Gilligan, CFA, CIPM explored the evolving nature of training in our field. The key message: cookie-cutter training doesn't cut it anymore. With increasing regulatory complexity and rapidly advancing technology, firms must invest in flexible, personalized learning programs.

Whether it's improving communication skills, building tech proficiency, or embedding a culture of curiosity, the session emphasized that training must be more than a check-the-box activity. Ongoing mentorship, cross-training, and embracing neurodiversity in learning styles are all part of building high-performing, engaged teams.

AI is Here—But It Needs a Human Co-Pilot

Several sessions explored the growing role of AI and automation in performance and reporting. The consensus? AI holds immense promise, but without strong data governance and human oversight, it’s not a silver bullet. From hallucinations in generative models to the ethical challenges of data usage, AI introduces new risks even as it streamlines workflows.

Use cases presented ranged from anomaly detection and report generation to client communication enhancements and predictive exception handling. But again and again, speakers emphasized: AI should augment, not replace, human expertise.

Private Markets Require Purpose-Built Tools

Private equity, private credit, real estate, and hedge funds remain among the trickiest asset classes to measure. Whether debating IRR vs. TWR, handling data lags, or selecting appropriate benchmarks, this year's sessions highlighted just how much nuance is involved in getting private market reporting right.

One particularly compelling idea: using replicating portfolios of public assets to assess the risk and performance of illiquid investments. This approach offers more transparency and a better sense of underlying exposures, especially in the absence of timely valuations.

Shorting and Leverage Complicate Performance Attribution

Calculating performance in long/short portfolios isn’t straightforward—and using absolute values can create misleading results. A session on this topic broke down the mechanics of short selling and explained why contribution-based return attribution is essential for accurate reporting.

The key insight: portfolio-level returns can fall outside the range of individual asset returns, especially in leveraged portfolios. Understanding the directional nature of each position is crucial for both internal attribution and external communication.

The SEC is Watching—Are You Ready?

Compliance was another hot topic, especially in light of recent enforcement actions under the SEC Marketing Rule. From misuse of hypothetical performance to sloppy use of testimonials, the panelists shared hard-earned lessons and emphasized the importance of documentation. This panel was moderated by Longs Peak’s Matt Deatherage, CFA, CIPM and included Lance Dial, of K&L Gates along with Thayne Gould from Vigilant.

FAQs have helped clarify gray areas (especially around extracted performance and proximity of net vs. gross returns), but more guidance is expected—particularly on model fees and performance portability. If you're not already documenting every performance claim, now is the time to start.

“Phantom Alpha” Is Real—And Preventable

David Spaulding of TSG, closed the conference with a deep dive into benchmark construction and the potential for “phantom alpha.” Even small differences in rebalancing frequency between portfolios and their benchmarks can create misleading outperformance. His recommendation? Either sync your rebalancing schedules or clearly disclose the differences.

This session served as a great reminder that even small implementation details can significantly impact reported performance—and that transparency is essential to maintaining trust.

Final Thoughts

From automation to attribution, PMAR 2025 showcased the depth and complexity of our field. If there’s one overarching takeaway, it’s that while tools and techniques continue to evolve, the core principles—transparency, accuracy, and accountability—remain as important a sever.

Did you attend PMAR this year? We’d love to hear your biggest takeaways. Reach out to us at hello@longspeakadvisory.com or drop us a note on LinkedIn!

ColoradoBiz Names Longs Peak’s Jocelyn Gilligan, CFA, CIPM as a Gen XYZ Top Young Professional
Longs Peak is pleased to announce that Partner and Co-Founder, Jocelyn Gilligan has been named a GenXYZ Top Young Professional by ColoradoBiz Magazine. As ColoradoBiz states, “They’re uncommon achievers, whether as entrepreneurs, CEOs, nonprofit leaders, visionaries critical to their companies’ success or, in some cases, all of those roles. This year’s Top 25 Young Professionals figure to continue making a difference professionally and in their communities for years to come.”
March 14, 2023
15 min

Longs Peak is pleased to announce that Partner and Co-Founder, Jocelyn Gilligan has been named a GenXYZ Top Young Professional by ColoradoBiz Magazine.

As ColoradoBiz states, “They’re uncommon achievers, whether as entrepreneurs, CEOs, nonprofit leaders, visionaries critical to their companies’ success or, in some cases, all of those roles. This year’s Top 25 Young Professionals figure to continue making a difference professionally and in their communities for years to come.”

Jocelyn grew up in Boulder, CO and graduated from the University of Colorado. She started her career at Ernst & Young in New York City where she worked on their Financial Services Transfer Pricing Team. She transferred with EY to their office in Shanghai and then eventually to Hong Kong. Jocelyn left EY as a Manager and relocated back to Colorado where she and her husband started a family. Soon thereafter, Jocelyn and Sean founded Longs Peak out of a small one-car garage in their home in Longmont, CO. Now running a thriving team of 14, Jocelyn has weathered the ups and downs of entrepreneurship. She credits a lot of their success to their amazing team and the community of entrepreneurs they live near and network with (Longs Peak is an active member of EO (Entrepreneurs Organization)).

Jocelyn is a voting member of the PTO at her children’s school and a member of Women in Investment Performance Measurement, a group recently founded to support women in the investment performance industry.

About ColoradoBiz’s Top 25 Young Professionals

The 13th annual Gen XYZ awards is open to those under 40 who live and work in Colorado — numbered in the hundreds, making for difficult decisions and conversations among judges, as always. Applications were judged by our editorial board based on career achievement, community engagement and their stories of how they got to where they are now.

About Longs Peak

Longs Peak is a purpose and values-driven company. It is our mission to make investment performance information more transparent and reliable—empowering investors to make better, more informed investment decisions.

At the onset, we were looking to help smaller investment managers by giving them access to professional performance experts and tools typically only available to very large firms. We know that our work enables emerging managers to compete with the big guys and helps facilitate their growth. We strive to be our clients’ most valued outsource partner and to be known for our exceptional client service. We know that providing exceptional client service means that we must first create a culture that lives by the ideals we are trying to create for our clients. A place where incredibly talented individuals are empowered to put their best work into the hands of clients that truly value what we do. As a firm, we recognize that our greatest asset is people – both those we work with and those we work for. We continue to evolve into something that represents the needs of both of these groups and hope someday a GIPS Report is provided to every prospective investor in the world.