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GIPS
Global Investment Performance Standards
TERM 2
ACCRUAL ACCOUNTING (pg 213)
DEFINITION 2
The recording of financial transactions as they come into
existence rather than when they are paid or settled.(Level I
2012 Volume 1 Ethical and Professional Standards and
Quantitative Methods, 7th Edition. Pearson Learning
Solutions 213).<vbk:9781256112754#page(213)>
TERM 3
ALL-IN FEE (pg
DEFINITION 3 A type of BUNDLED FEE that can include any combination of INVESTMENT MAN- AGEMENT FEES, TRADING EXPENSES, CUSTODY FEES, and ADMINISTRATIVE FEES. ALL-IN-FEES are client specific and typically offered in certain jurisdictions where asset management, brokerage, and custody services are offered by the same company.(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 213).<vbk:9781256112754#page(213)> TERM 4
CAPITAL EMPLOYED (REAL ESTATE) (pg. 214)
DEFINITION 4 The denominator of the return calculations and is defined as the weighted-average equity (weighted-average capital) during the measurement period. CAPITAL EMPLOYED does not include any INCOME RETURN or CAPITAL RETURN earned during the measurement period. Beginning capital is adjusted by weighting the EXTER- NAL CASH FLOWS that occurred during the period. (Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 214).<vbk:9781256112754#page(214)> TERM 5
CARRIED INTEREST (REAL ESTATE and
PRIVATE EQUITY) (pg. 214)
DEFINITION 5
The profits that GENERAL PARTNERS are allocated from the
profits on the investments made by the investment vehicle.
Also known as carry or promote.(Level I 2012 Volume 1
Ethical and Professional Standards and Quantitative Methods,
7th Edition. Pearson Learning Solutions 214).
CARVE-OUT
A portion of a PORTFOLIO that is by itself representative of a distinct investment strat- egy. It is used to create a track record for a narrower mandate from a multiple-strategy PORTFOLIO managed to a broader man- date. For periods beginning on or after 1 January 2010, a CARVE-OUT MUST be managed separately with its own cash balance.(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 214). <vbk:9781256112754#page(214)> TERM 7
CLOSED-END FUND (REAL ESTATE and
PRIVATE EQUITY)
DEFINITION 7 A type of investment vehicle where the num- ber of investors, total COMMITTED CAPI- TAL, and life are fixed and not open for subscriptions and/or redemptions. CLOSED- END FUNDS have a capital call (drawdown) process in place that is controlled by the GENERAL PARTNER.(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 214).<vbk:9781256112754#page(214)> TERM 8
COMPLIANT PRESENTATION
DEFINITION 8 A presentation for a COMPOSITE that con- tains all the information REQUIRED by the GIPS standards and may also include ADDITIONAL INFORMATION or SUPPLE- MENTAL INFORMATION. (See Sample COMPLIANT PRESENTATIONS in Appen- dix 4A).(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 214).<vbk:9781256112754#page(214)> TERM 9
COMPOSITE
DEFINITION 9
An aggregation of one or more PORTFO- LIOS managed
according to a similar invest- ment mandate, objective, or
strategy.(Level I 2012 Volume 1 Ethical and Professional
Standards and Quantitative Methods, 7th Edition. Pearson
Learning Solutions 215).<vbk:9781256112754#page(215)>
TERM 10
CUSTODY
FEE
DEFINITION 10 The fees payable to the custodian for the safekeeping of PORTFOLIO assets. CUS- TODY FEES are considered to be ADMINIS- TRATIVE FEES and typically contain an asset-based portion and a transaction-based portion. The CUSTODY FEE may also include charges for additional services, including accounting, securities lending, and/or performance measurement. Custo- dial fees that are charged per transaction SHOULD be included in the CUSTODY FEE and not included as part of TRADING EXPENSES.(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 215).
INTERNAL
DISPERSION
A measure of the spread of the annual returns of individual PORTFOLIOS within a COMPOSITE. Measures may include, but are not limited to, high/low, range, or STANDARD DEVIATION (asset weighted or equal weighted) of PORTFOLIO returns.(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 217). <vbk:9781256112754#page(217)> TERM 17
INVESTMENT MULTIPLE (TVPI) (REAL ESTATE
and PRIVATE EQUITY)
DEFINITION 17
TOTAL VALUE divided by SINCE INCEP- TION PAID-IN
CAPITAL.(Level I 2012 Volume 1 Ethical and Professional
Standards and Quantitative Methods, 7th Edition. Pearson
Learning Solutions 218).<vbk:9781256112754#page(218)>
TERM 18
LIMITED PARTNER (REAL ESTATE and PRIVATE
EQUITY)
DEFINITION 18 An investor in a LIMITED PARTNERSHIP. The GENERAL PARTNER is liable for the actions of the LIMITED PARTNERSHIP, and the LIMITED PARTNERS are generally protected from legal actions and any losses beyond their COMMITTED CAPITAL.(Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 218). <vbk:9781256112754#page(218)> TERM 19
LIMITED PARTNERSHIP (REAL ESTATE and
PRIVATE EQUITY)
DEFINITION 19 The legal structure used by most PRIVATE EQUITY and REAL ESTATE CLOSED-END FUNDS. LIMITED PARTNERSHIPS are usu- ally fixed life investment vehicles. The GEN- ERAL PARTNER manages the LIMITED PARTNERSHIP pursuant to the partnership agreement. (Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 218).<vbk:9781256112754#page(218)> TERM 20
LINK
DEFINITION 20
- Mathematical Linking: The method by which sub-period returns are geometri- cally combined to calculate the period return using the following formula: Periodreturn= [(1+R1)x(1+R2)...(1+Rn)]-1 where R1, R2...Rn are the sub-periodreturns for sub-period 1 through n,respectively.2. Presentational Linking: To be visuallyconnected or otherwise associated within a COMPLIANT PRESENTATION (e.g., two pieces of information are LINKED by placing them next to each other). (Level I 2012 Volume 1 Ethical and Professional Standards and Quantitative Methods, 7th Edition. Pearson Learning Solutions 218).
OPEN-END FUND (REAL ESTATE and PRIVATE
EQUITY)
A type of investment vehicle where the num- ber of investors
and the total COMMITTED CAPITAL is not fixed and is open for
sub- scriptions and/or redemptions. (See EVERGREEN FUND)
(Level I 2012 Volume 1 Ethical and Professional Standards
and Quantitative Methods, 7th Edition. Pearson Learning
Solutions 219).<vbk:9781256112754#page(219)>
TERM 22
PERFORMANCE-BASED
FEE
DEFINITION 22
A type of INVESTMENT MANAGEMENT FEE that is typically
based on the perform- ance of the PORTFOLIO on an absolute
basis or relative to a BENCHMARK.(Level I 2012 Volume 1
Ethical and Professional Standards and Quantitative Methods,
7th Edition. Pearson Learning Solutions 219).
<vbk:9781256112754#page(219)>
TERM 23
RESIDUAL VALUE (PRIVATE EQUITY and REAL
ESTATE)
DEFINITION 23
The remaining equity that LIMITED PART- NERS (or investors)
have in an investment vehicle at the end of the performance
reporting period.(Level I 2012 Volume 1 Ethical and
Professional Standards and Quantitative Methods, 7th
Edition. Pearson Learning Solutions 221).
<vbk:9781256112754#page(221)>
TERM 24
RVPI (REAL ESTATE and PRIVATE EQUITY)
DEFINITION 24
RESIDUAL VALUE divided by SINCE INCEPTION PAID-IN
CAPITAL. (See UNREALIZED MULTIPLE)(Level I 2012 Volume 1
Ethical and Professional Standards and Quantitative Methods,
7th Edition. Pearson Learning Solutions 221).
<vbk:9781256112754#page(221)>
TERM 25
REALIZATION MULTIPLE (DPI) (REAL ESTATE
and PRIVATE EQUITY)
DEFINITION 25
SINCE INCEPTION DISTRIBUTIONS divided by SINCE
INCEPTION PAID-IN CAPITAL.(Level I 2012 Volume 1 Ethical
and Professional Standards and Quantitative Methods, 7th
Edition. Pearson Learning Solutions 220).
