Global Investment Performance Standards are on the agenda for private client investment managers as compliance becomes a necessity in beauty parades, according to new research commissioned by UK GIPS software provider Performa. Already widely accepted in the institutional investment sector, GIPS-compliance is now becoming an issue for private client investment managers. Charterhouse Research, a specialist financial market research company, undertook this research study to assess the extent to which fund managers outside the institutional sector are becoming GIPS-compliant. The findings were based on interviews conducted in autumn 2007 with 30 senior executives in private client investment managers, hedge funds and fund of fund managers. Although only a minority are currently GIPS-compliant (4 out of 30), of the 26 not currently compliant, 16 consider GIPS appropriate to their market, with four out of five hedge funds considering it appropriate and expecting to become GIPS compliant in the future – typically within the next 12 months. Reasons for seeking GIPS compliance included the pressure from gatekeepers such as IFAs or consultants and pressure from big private clients or institutional investors. The main driver, however, is the ability to compete for business in competitive pitch situations and beauty parades. Commenting on the findings, Performa’s chairman Anthony Howland said: “In a climate of consolidation within the hedge fund industry and with pension funds getting increasingly interested in hedge funds and funds of funds, the industry should evolve and is inevitably going to become more regulated. I expect private client managers will also be required to disclose more details about their products and follow best practice guidelines in the future, as their clients increasingly demand it.”