How Cordius complied
Cordius Asset Management, one of the first firms in continental Europe to become fully compliant with a presentation performance standard, maintains that, although the process of becoming fully compliant was a difficult one, it was well worth the labour.
Earlier this year, Cordius achieved both level I and level II compliance with AIMR-PPS, the performance presentation standards developed by the Association for Investment Management and Research. Level I compliance takes place at the firm level, and level II compliance is at the composite level.
The process necessary to achieve compliance was begun in September 1999, according to Chantal Denonder, the asset manager in charge.
Thus it took the firm less than four months to implement the required systems. “It was a lot of work,” she says. “To do it without stress, you would require two or three months longer.” She also points out that Cordius could complete the task in such a short period because it is a relatively small firm, and that it would be more difficult for a multinational, for example.
The most important part of the job was devising the composites: Cordius has 156 composites, of which 70 are client-specific. Defining the composites was a laborious process. Questionnaires were circulated to front-office staff to clarify the nature of the funds under management; the responses were then collated and summarised, and the summaries were sent back to the front-office for confirmation. “There was a very long back and forth,” Denonder says.
“No one person knows the whole company.”
Cordius chose the route of developing its own systems, rather than buying in an off-the-shelf product. “When you begin, it is difficult to know what you need. Maybe in the future we will buy systems in, now that we know what is involved for our firm,” she explains. Because of the complex nature of the process, and because it has so recently been completed, Denonder says that it is difficult to estimate the costs, beyond stressing that it does take a lot of time and money and involves personnel and resources from all levels of the company.
Although it has been a difficult and complicated process, Denonder does not doubt the value of achieving full compliance. “It is very important for institutional clients, but also it is a very important internal audit,” she explains. “It is not only for the clients: we have done it for the whole company.”
Although Cordius has achieved compliance, that does not mean that the process has ended. “This way you can see what is good, what is bad, and what can be improved,” says Denonder. “For the company as a whole, it is an ongoing process.” In addition, Cordius has plans to achieve compliance with GIPS some time before the end of the year. Stephanie Schwarz