Trust is one of the most valuable assets any investment organization can have.

That is one reason the Global Investment Performance Standards (GIPS®) have become the industry's recognized framework for investment performance reporting. Built on the principles of fair representation and full disclosure, the GIPS standards help organizations present performance information in a consistent, transparent, and credible manner.

Yet many investment managers view GIPS compliance as a major undertaking requiring new systems and significant resources. In reality, many firms may be closer than they think.

Pursuing GIPS compliance is a lot like smoking great BBQ. Anyone can produce one great brisket. The challenge is producing the same great brisket every time.

The same principle applies to investment performance reporting. Whether you're presenting performance to prospective clients, consultants, trustees, beneficiaries, regulators, or investment committees, GIPS compliance helps ensure the information being served is prepared consistently, accurately, and transparently.

Great BBQ Starts Long Before the Smoker

Great BBQ doesn't start when the brisket goes on the smoker. It starts with selecting the right cut of meat, preparing the seasoning, and ensuring the smoker is ready before the first spark is lit. The journey to GIPS compliance is remarkably similar.

Successful compliance efforts begin with organizational commitment, a solid understanding of the standards, documented policies and procedures, and sometimes guidance from experienced professionals. Like preparing a brisket for a long cook, the preparation phase lays the foundation for everything that follows.

Without that preparation, even the best intentions can lead to inconsistent results. The same is true for performance reporting, where organizations need a framework that supports how performance is measured, calculated, reviewed, and presented.

Trust the Process

Every experienced pitmaster has a method. The details may vary, but successful pitmasters rely on a process that has proven itself over time.

A firm's policies and procedures define how performance is calculated, reviewed, documented, and presented. Once those procedures are established, compliance becomes less about creating new processes and more about consistently following a documented methodology.

Like a pitmaster trusting a proven recipe, investment managers benefit from having a performance reporting process that can be applied consistently year after year. When questions arise, there should be a clear answer backed by documented procedures rather than institutional memory or individual judgment.

Many firms assume pursuing GIPS compliance requires building an entirely new framework from scratch. In reality, they often discover they already have much of the foundation in place.

They may already:

• Calculate performance using established methodologies.

• Produce regular performance reports.

• Maintain documented policies and procedures.

• Retain historical performance records.

Like a pitmaster who already owns the smoker and knows how to manage the fire, many organizations discover they are starting with a stronger foundation than they assumed.

Today's investment environment demands documented and repeatable processes. As a result, many firms have spent years building robust performance measurement, reporting, and governance practices, only to discover that much of the foundation required for GIPS compliance is already in place.

The journey to compliance often begins not by building entirely new processes, but by evaluating existing ones. The question is often not, "Where do we start?" It's, "How much of the recipe do we already have?"

Great BBQ Builds a Reputation

The strongest organizations rely on processes that are documented, repeatable, and consistently applied. That is one reason GIPS compliance continues to matter during manager searches and due diligence reviews.

According to the 2024 CFA Institute Asset Owner Performance Survey, 68% of asset owners either require or ask about GIPS compliance when selecting external managers of liquid asset classes.

Using our BBQ analogy, it's like a pitmaster being known for turning out exceptional brisket weekend after weekend. People trust the product because they trust the process behind it. GIPS compliance helps create that same level of confidence in how investment performance is measured and reported.

For investment managers, a claim of compliance can help differentiate the firm during competitive searches by demonstrating adherence to a recognized framework for investment performance reporting. For asset owners, compliance can reinforce the same principles of transparency and governance in reporting to boards and oversight bodies.

Conclusion

The goal of great BBQ is simple: every guest should enjoy the same high-quality meal every time they visit. The goal of GIPS compliance is similar. Clients, consultants, and oversight bodies should receive performance information that is complete, transparent, and consistently prepared.

Great BBQ isn't the result of luck. It's the result of preparation, discipline, and a proven process. Organizations pursuing GIPS compliance follow a similar path by establishing the right foundation, documenting their methodology, and applying it consistently.

Many organizations already have the smoker, the recipe, and the experience. They may be closer to GIPS compliance than they realize.

The opportunity is to bring those elements together under a globally recognized framework built on fair representation and full disclosure.

The question is: How close are you already?

Cascade Compliance helps investment managers and asset owners pursue GIPS compliance by evaluating existing processes, reviewing policies and procedures, identifying gaps, and providing practical guidance throughout the compliance journey.

If your organization is considering GIPS compliance, we would welcome the opportunity to discuss where you are today and what steps may help move you closer to a claim of compliance.

Contact us at info@cascadecompliance.com

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