Measuring up to standards
Most large investment managers now comply with performance presentation standards according to new research from PricewaterhouseCoopers. PwC received responses from 69 investment managers around the world for its report 2001 Global trends in performance measurement.
The survey found that 95% of those who responded are either compliant with at least one measurement standard are looking to become so. Of those as yet unverified, two thirds say they will be within the next two years.
Attribution analysis is considered increasingly important by many investment managers according to the report. Of the three quarters of respondents who answered the section on attribution analysis, nine out of 10 either use or are installing a system that measures performance measurement. When asked the reasons behind the provision of attribution analysis, 70% said it provides a marketing advantage. More than eight out of ten said it improves information about their management and this figure leads the report to conclude that clients are demanding better analysis and more accountability from their investment managers.
Says Kelvin Laing-Williams, a partner at PwC: “as more countries move to adopt performance standards, and as the investment management industry becomes more global, we believe there will be a sharp rise in demand for reliable independent data regarding trends in performance measurement.”
PwC says that the evolution of the global investment performance standards (GIPS) has led to a rapid acceptance of a global framework for performance measurement. It also believes that whichever standard firms adhere to, they face the same issues irrespective of their domiciles.