Association for Investment Management and Research

Transcription

1 Association for Investment Management and Research MINUTES OF THE INVESTMENT PERFORMANCE COUNCIL Conference Call Tuesday, 9 December :30am to 9:00am Primary Members Present: James Hollis, Chair Carl Bacon Louis Boulanger Lynn Clark Alain Ernewein Bernd Fischer Stefan Illmer Yoh Kuwabara Terence Pavlic Deborah Reidy* Glenn Solomon Paul Saint-Pierre** Karyn Vincent Hans-Jorg von Euw * Representing Pension Funds 1 seat. Consultants seat was not represented. ** Representing Venture Capital/Real Estate seat Affiliate Members Present: Yoshiaki Akeda Herb Chain Lesley Harvey Shigeo Ishigaki Todd Jankowski Carol Kennedy Louise Spencer AIMR Staff Present: Observers Present: Rob Bergstrom Alecia Licata Yolanda Rush See Appendix A Gregory Turk Pat Walters 1. Approval of the Minutes of the 25 September 2003 In-Person Meeting Mr. Kuwabara wanted clarification on the second and sixth paragraphs on page 5 of the minutes that referred to the status of the Calculation Methodology Guidance Statement and the Carve Out Guidance Statement, respectively. Mr. Hollis responded that the date issues involved are being coordinated with Gold GIPS and that these will go before the AIMR Board once they are resolved

2 On page 10, Mr. Kuwabara asked if the minutes would reflect more clearly why the Japanese private equity marketplace wasn t ready to implement the GIPS Private Equity Provisions. Ms. Vincent noted that Ms. Spencer is referred to mistakenly on page 8. This will be corrected. Mr. Akeda wanted the discussion on GIPS 5.A.6 noted in the minutes. Ms. Licata responded that it would be noted that the issue still remains unresolved. Mr. Bacon added that the Interpretations Subcommittee began discussing this topic at their most recent meeting. 2. Nominations Committee Update Ms. Licata gave an update on the nominations process. This process was delayed for a period of time having originally been anticipated for completion in August. Since the September in-person meeting of the IPC in Sydney, the Nominations Committee has been reinstituted and copies of all CVs and applications received to date have been circulated. The open seats are for Japan, Performance Measurement, and Pension Funds. It is anticipated that final recommendations for appointments to these open seats will be presented to the AIMR Board Oversight Committee in February of In addition, rotation on the Interpretations and Verification Subcommittees will be occurring at the same time. One quarter of these committees rotates each year. 3. Country Standards Subcommittee Update Endorsement of the Belgian Association of Pension Funds as a Sponsor of GIPS (English) Mr. Solomon reported that the CSSC has received an application from the Belgian Association for Pension Funds to be acknowledged as a Country Sponsor of GIPS in English. The CSSC received confirmation from the association that there are no competing local standards and that they are committed to incorporating any future modifications of GIPS as required and embracing the centralized GIPS interpretations database. Mr. Bacon motioned to approve the association as a sponsor of GIPS (English). The motion was seconded by Mr. Kuwabara. The motion was approved. Endorsement of the Egyptian Investment Performance Standards (E-IPS) as a CVG This issue has been deferred as the CSSC is still in correspondence with the Egyptian sponsor. The process is in the final stages and the CSSC expects to have an vote soon or vote and discussion at the March IPC meeting. Other CVGs/TGs Mr. Solomon added that the CSSC is also looking at Spain and South Africa s submissions and expects to put these to an vote in the near future. Update of Gold GIPS Evolution and Implementation Plan - 2 -

3 Mr. Solomon stated that after the executive session that will occur at the end of this meeting, the CSSC expects to be able to release the draft version of Gold GIPS sometime early in Ms. Licata stated that it is still expected that the draft will presented to the AIMR Board at their February meeting assuming all timetables are met. Assuming the draft is approved by the AIMR Board, it could be released for public comment in late February. 4. Real Estate Subcommittee Update Mr. Saint-Pierre presented the Real Estate Provisions for GIPS to the IPC for approval on behalf of the Real Estate Subcommittee. The provisions have remained essentially the same since the IPC last looked at them in March of The Real Estate Subcommittee was able to agree on applying a real estate valuation provision for all types of real estate whether it be for direct or indirect investments (originally, indirect investments were treated differently). The implementation of external valuation was extended to 31 December, Mr. Ernewein proposed the Provisions be approved. Ms. Clark seconded. The Real Estate Provisions were approved. Ms. Licata stated that this will now go to the Board Oversight Committee and, ultimately, to the AIMR Board as part of Gold GIPS. She added that the Adopting Release for these Provisions is available to the IPC membership. 5. Advertising Subcommittee Update Ms. Spencer reviewed the points that the IPC membership felt required further consideration after the Sydney in-person meeting. The first issue was can a fully compliant GIPS presentation be presented in place of the required information for an advert. While Ms. Spencer felt the answer was yes, she did not think the wording in the Advertising Guidelines made that clear. She proposed changing the third paragraph in the introduction to say that the Advertising Guidelines are the mandatory minimum disclosure requirements for firms that include a claim of compliance in their advert. This would make it clear that these are minimum requirements and more can be put in. A sentence should also be added stating supplemental information that is nearly a full extraction from a fully compliant presentation, or is the entire presentation, need not be labeled as supplemental. These changes met with the IPC s approval. The second question is whether the option to allow 1, 3, and 5-year annualized returns and/or 5- year annual returns should remain. There were seventeen comments on the proposal, but only two of them felt this option should not be in the Guidelines. At the recent meeting in Lisbon, the EIPC membership felt 1, 3, and 5-year annualized returns should not be allowed on their own. Ms. Spencer summarized that the argument for requiring annual returns is to avoid the smoothing effect that annualized returns can have on their own. It also may take away from comparability because firms may annualize to different period or year-ends

4 Ms. Spencer stated that the argument for allowing annualized returns is that the Guidelines are trying to allow firms to present in an abbreviated manner for a practical approach to doing advertising. It is not presumed that potential clients make decisions based only on the advertised information and that they would eventually get a fully compliant presentation. Also, the easier and more cost-effective the Guidelines are, the more likely firms are to adopt them. In addition, requiring annual returns would increase the data required to be presented considerably. Ms. Spencer stated that there are two options; leave the standards as they are, which allow firms to either show annualized and/or show annual, or make annual a requirement and the annualized optional. Ms. Spencer also asked the IPC if the Advertising Guidelines would have to go back out for public comment if the latter option was elected. Mr. Hollis proposed the IPC vote on this via after the call. 6. Future Meetings 4 March 2004, In-Person Meeting in Brussels, Belgium 29 June 2004, Conference Call Meeting (7:00am 9:30am EST) 7. Any Other Business Ms. Licata stated that the IPC Update Report listed on the agenda will be circulated separately in the interests of time. This report can be found on the AIMR website. 8. Questions from Observers Mr. Kazumichi asked that IPC materials be made available to observers on the AIMR website prior to conference calls. Ms. Licata stated that the materials for this call will be up shortly and announced via and agreed to try to have the materials for the next meeting available prior to its start. Mr. Chapman commented that foreign fund managers seeking to market their services in the U.S. are finding that they are being screened out of the RFP process because of their compliance with GIPS or a CVG that is not AIMR-PPS. He asked if this would be a good time for AIMR to follow the lead of the Swiss Bankers in adopting a standard which complies exactly with GIPS rather than requiring a longer period of history. Mr. Hollis responded that he thinks the problem may be just educating the U.S. market on what GIPS is. He believes this is incumbent upon AIMR and the IPC and ensured that when Gold GIPS is finished, sponsors and consultants will be educated in an aggressive manner to make sure they understand that GIPS has the same fundamental requirements as AIMR-PPS. Ms. Licata suggested a progress report in this area be made at the March IPC meeting in Belgium. Mr. Hollis thanked the observers for attending

5 APPENDIX A OBSERVERS PRESENT 24 JUNE 2003 IPC CONFERENCE CALL First Last Country Company 1. Brian Chapman England KPMG 2. L. Todd Jullierat USA Banc One Investment Advisors 3. Karita Kazumichi Japan SAAJ 4. Angela Keane Australia QIC 5. Daryl Krivanec USA Hart Advisors 6. Jean-Pierre Mittaz USA Goldman Sachs 7. Alessandro Rota Italy Assogestioni 8. Jeff Tarumianz USA Beacon Verification Services, LLC - 5 -