Month: August 2019

Investment performance tables and charts are an excellent way to track and showcase the success of your managed accounts and/or fund. Having a performance examination done on your monthly, annual and cumulative returns and comparing them to your benchmark provides valuable assurance to investors and an invaluable marketing tool for raising capital. There are several different levels of attestation service, each offering different advantages based on each specific client’s needs. Which level of service would serve your specific needs best? Please read on to learn how Spicer Jeffries LLP can help you.

“Agreed Upon Procedures” (AUP) Engagements

When all you need is internal assurance that an independent accountant has looked over your performance table, recalculated the returns, and agreed the data to the source documents, an AUP is the quickest and most cost effective way to get this done. The final report outlines the specific procedures performed and the results obtained.

Performance Examinations

Done in accordance with AICPA attestation standards, this is essentially an audit of your returns and culminates in a report in which we give a formal opinion on whether the performance table and accompanying disclosures are fairly stated. The exam includes confirming the source account statements with the brokers and involves a higher level of procedures over the source data, methods, and returns than an AUP typically covers. The exam provides assurance that industry standard criteria and accounting methods are used in calculating and presenting the returns, which explained in the footnotes. Performance examinations are invaluable for marketing purposes, especially for launching and raising additional capital for funds.

GIPS Verifications and Examinations

Global Investment Performance Standards, or GIPS® is a set of standards developed by the CFA Institute. GIPS is the widely recognized as the gold standard when it comes to investment performance reporting. In order to claim compliance with GIPS, the entire firm must comply with its structural, reporting, and procedural requirements on a firm-wide basis currently and for a minimum number of previous years. Specific GIPS-compliant presentations of returns must follow standards governing how investment returns are calculated and reported which are more detailed compared to typical performance reporting. GIPS standards are the most robust set of investment performance standards in the marketplace and compliance with them demonstrates a sustained level of commitment over the long term.

GIPS engagements are conducted on two different levels. The first level, called a “verification” is performed for the firm as a whole. The second level, called an “examination” is performed on a specific presentation of a composite. Typically, both levels are performed, but the examination is optional and can only be performed either after or concurrently with a verification. GIPS requirements for verifications and examinations are structurally similar to AICPA audit standards. Given that we are certified public accountants specialized in serving the securities industry, we offer a unique advantage in performing this service.

Don’t hesitate to contact us immediately to schedule a one-on-one call with our service professionals to discuss your needs and specific situation. It is our pleasure to answer your questions and bring the confidence and trust that you and your investors deserve.

Spicer Jeffries’ partners have been involved with newly launched hedge and commodity funds, both registered and unregistered, as well as private equity funds and mutual funds, since the mid- 1980s. With years of previous accounting work experiences between them, and a bold decision to focus efforts on the securities industry, Spicer’s founding partners learned early on what it takes to launch a fund successfully and the many different challenges that a new fund manager may encounter. Now, after nearly four decades of working in the securities industry and servicing hundreds of hedge and commodity funds, Spicer Jeffries LLP has developed its highly focused “Emerging Manager Solution” program for new fund managers. We believe this program offers individuals a true advantage in the initial stages of the fund and its development and will only boost a new fund’s chances of success.

After almost ten years of servicing hedge and commodity fund clients, Spicer’s founding partners were able to recognize a recurring stumbling block to success for new fund managers. Having focused their efforts on working with hedge and commodity fund clients, particularly new emerging funds, it became clear that the key service providers chosen have a great effect to
the overall success of the new manager. This seems particularly true for service providers covering the areas of legal, administrative, prime brokerage and audit and tax services. Spicer Jeffries believes that these service providers must have significant experience with the type of fund being launched in order that they not only assist in the near term but also the long term. As part of the “Emerging Manager Solution,” Spicer works with all of our new fund managers in selecting the right service providers that properly fit the new manager’s unique situation.

Spicer Jeffries also realized that in the specific area of audit and tax services, those new fund managers that exhibited cost control from the initial days of the fund had a much greater ability to succeed than others that did not. As a result, Spicer’s partners decided it necessary to develop a refined program focused directly at new fund managers. The “Emerging Manager Solution”
was created by taking our long history of working with funds and developing processes, procedures and technology to deliver a cost efficient solution for the emerging manager while still bringing significant expertise and great service to our fund clients.

The primary areas of focus in the “Emerging Manager Solution” cover the following: a fund’s formation and organization, its fee structure, how to choose the proper service providers, addressing regulatory issues, fund compliance, and marketing the fund to new investors.

SJ is proud to be ranked among the Top 10 Hedge Fund Auditors by the HedgeFund Alert.  For seven consecutive years, 2014 through 2020, Spicer Jeffries has continued its dedication to the securities industry and the Alternative Investment space.  These rankings are compiled and based on each year’s SEC filings by hedge fund managers.