Practical Portfolio Performance Measurement and Attribution, Second Edition

Appendix L

Guidance Statement on Performance Record Portability¹⁸

Revised Effective Date: 1 January 2006 Adoption Date: 18 May 2001 Effective Date: 18 May 2001 Retroactive Application: Not Required Public Comment Period: Sep-Dec 2000

GUIDANCE STATEMENT ON PERFORMANCE RECORD PORTABILITY (REVISED)

Introduction

In the current global market for merger, acquisition, and consolidation of investment management firms, past performance records are increasingly valuable assets for their owners. But historical records are the result of many factors (e.g. people, process, discipline, and strategy) that may not be easily transferred to a new entity and still warrant having the same label as the old entity. The applicability and integrity of the performance record is only as good as the ongoing integrity of the strategy and all the contributing factors. Portability of performance records is a very important area that should be clarified within the Global Investment Performance Standards (GIPS^®). In addition, because the legal issues and requirements surrounding portability can be particularly complex, firms are reminded that under the GIPS standards they must comply with all applicable laws and regulations regarding portability before applying this Guidance Statement.

Performance is the record of the firm, not of the individual

Changes in a firm’s organization are not permitted to lead to alteration of historical composite results. Therefore, composites must include all accounts managed ...