Fkn GIPS ... Gross OR Net, or Net? net, direction, reference, recently

cfa10yrplan

I was like 99% sure I read that you can do either one, as gross is only "recommended" (of that im 100% sure, just re-read it).

But recently I had a buddy who swears you MUST show net of fees return, and I think i encountered a question that was kind of vague but pushed you in that direction. I searched the text high and low and found no explicit statement to either way, but it did reference showing both gross and net, as if it was permissible either way.

Can someone confirm, with reference, if you can show either or? [exuding PE which is gross AND net SI-IRR]

lcw77

I think you can show either and just have to cleary disclose and labelle. For PE its net and gross is must.

Zestt

As odd as it sounds, I think GIPS requires either or, but Asset Manager Code of Professional Conduct requires both. I had the same confusion but that is what I concluded...

mik82

That is what I had understood as well. I am certain with AMC.

bkballa

In general, its either gross or net , but you have to disclose which one. However, they RECOMMEND that you use gross.

For RE, its also gross or net.

For Private Equity, its both gross and net .

ll11

"Presentation and Reporting — Recommendations
5.B.1 FIRMS SHOULD present GROSS-OF-FEES returns."


So do they mean that IN addition to the net of fees, you should present gross of fees?
And if it is true that it is Net-OF fees , the reason should be that they are always lower, right?

Windjam

I`m not getting this. Aren`t you supposed to disclose BOTH!

strikethree

AMC- disclose both- REQUIRED

GIPS- you can present either, but gross is RECOMMENDED

GIPS, P/E: net of fees and gross of fees SI-IRR

Wrap Fees/SMA- must present returns after deduction of all BUNDLED FEES (this makes sense if you think about it)

former

Don't know if this helps, but I'm looking at the Asset Manager Code right now...

Per the AMC:
"At a minimum, Managers should provide clients with gross- and net-of-fees returns and disclose any unusual expenses."

Valores

smokin'hot Wrote:
-------------------------------------------------------
> AMC- disclose both- REQUIRED
>
> GIPS- you can present either, but gross is
> RECOMMENDED
>
> GIPS, P/E: net of fees and gross of fees SI-IRR
>
> Wrap Fees/SMA- must present returns after
> deduction of all BUNDLED FEES (this makes sense if
> you think about it)


This was everyones take, however have you taken the sample exam? The question specifically says a violation took place because they did not report net of fees returns.