CEM Benchmarking Inc. is creating a new global reporting standard for institutional investors.
The global benchmarking company said it launched the initiative as a result of its institutional clients' requests to address a need to provide clarity in the gray areas of public reporting by region, said Tom Scheibelhut, Toronto-based head of product innovation, in an interview.
Much of that gray area involves the total investment cost of private equity, he said, and clients are asking: "Should management fees be reported net or gross of offsets, (and) is carried interest a fee at all?"
"There are some that believe executive compensation should be reported, and some don't," Mr. Scheibelhut said.
"I think there's a real need, there's a gap out there, there's no global cost reporting," he said. "We do want to improve the quality of reporting everywhere," he added.
The initial focus of the global reporting standard will be that definition of total investment cost, which will be followed by recommendations regarding cost disclosure detail and contextualization. CEM Benchmarking plans to release a draft in early 2023 that will be available for comment, he said.
Future topics the benchmarking company plans to explore are pension administration costs and ESG, Mr. Scheibelhut said.
A board advising on the creation of the global reporting standard for institutional investors, or GRSii, will initially consist of seven global asset owner executives, including Christopher J. Ailman, chief investment officer of the $314.8 billion California State Teachers' Retirement System, West Sacramento.