The European implementation of performance standards to the US AIMR/GIPS blueprint is influencing many pension funds to-wards more thorough performance measurement. The guidelines, which seek to remove the 'cherry picking' of stock performance previously used by some investment managers to win business, set out a strict methodology for any calculations done. And it is a system that is prompting many funds to de-mand an accurate, comparable re-cord of their own investment track, along the 'time measured weight of return' (TWR) standard used by GIPS.

The increasing importance of GIPS in Europe can be measured to some extent by the imminent appointment of John Stannard of Frank Russell to chair the AIMR implementation committee.

However, Stannard admits the uptake of GIPS is: slow but gradual", and that there are problems with differences in local implementation of the scheme.

"Fortunately most of the schemes being introduced are merely adding elements on to GIPS, such as in Germany, where there has been legal difficulties with the valuing of portfolios. With investors and funds beginning to think in terms of Europe and not individual countries, though, they are coming round to the need for such reporting analysis," he said.

Suggestions are also being made that AIMR could also act as an external auditor to funds, scrutinizing data before it is measured."