#3 Asset Owner
'ASSET OWNER - An entity that manages investments, directly or indirectly on behalf of participants, beneficiaries, or the organization itself. '
This term is defined as “An entity that manages investments, directly and/or through the use of EXTERNAL MANAGERS, on behalf of
participants, beneficiaries, or the organization itself. These entities include, but are not limited to, public and private pension funds, endowments, foundations, family offices, provident funds, insurers and reinsurers, sovereign wealth funds, and fiduciaries. ASSET OWNERS MUST have discretion over TOTAL ASSET OWNER ASSETS, either by managing assets directly or by having the discretion to hire and fire EXTERNAL MANAGERS .” in the GIPS 2020 Exposure Draft.
Key Points about This Term
- This term appears in the Guidance Statement expanding the GIPS to entities that manage assets on behalf of others, GIPS Guidance Statement for Asset Owners.
- What has been done now is the creation of specific Standards for use by this class of managers by formulating new Standards, repurposing applicable sections of provisions for Firms as well as relevant portions of the Guidance Statement
- Fun Fact – It appears 542 times in the Exposure Draft, excluding its appearance in the definitions and executive summary.
- Possible Evolution under new Standards – Asset Owners can now refer to their own specific sections under the new Standards (Fundamentals of Compliance, Input Data and Calculation Methodology, Total Fund and Composite Maintenance, Total Fund and Composite Time-Weighted Returns and Total Fund and Composite Money-Weighted Returns) to determine how they should apply the GIPS without the need to flip back and forth to that for Firms (Exposure Draft Sections 8 to 12).