CalPERS Adopts Global Investment Performance Standards

Issued by the CFA Institute, the standards are based on the principles of full disclosure and fair representation of investment performance

The California Public Employees’ Retirement System (CalPERS) has adopted CFA Institute’s Global Investment Performance Standards (GIPS). Introduced in 1999, the standards hold investment managers accountable for full disclosure and fair representation of investment performance. According to Cerulli Associates, the GIPS standards have been adopted by 1,653 firms in more than 40 markets around the world.

CalPERS said that while many asset owners require their investment managers to comply with the GIPS standards, it is less common for asset owners to apply the principles to their own performance reporting to oversight boards, governing bodies and plan beneficiaries.

“The GIPS standards allow firms to demonstrate that investment performance reporting meets globally accepted, ethical best practices,” says Robert Paterson, investment manager at CalPERS. “As an asset owner, adopting the GIPS standards indicates our commitment to use the highest rigorous performance calculation and presentation standards in our reporting. The GIPS standards are a critical part of our commitment to integrity, transparency and the interests of our beneficiaries.”

CalPERS said that GIPS compliance is the latest effort by it to join CFA Institute “in advancing its mission to raise professional standards in investment management.” CalPERS said that it has been an advocate of the CFA Institute Asset Manager code, a voluntary code of conduct whereby asset managers put client interests first. In fact, in 2016, CalPERS and seven other pension plan sponsors ran an open letter in media outlets, including The Wall Street Journal, expressing support for the code. In 2017, CalPERS and 15 other firms ran a similar letter in media outlets.

Currently, CalPERS is working with the CFA Institute to bring more diversity and inclusion in investment management.