Investor Relations & Reporting Flashcards
7 cards from real CFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Investor Relations & Reporting flashcards as text
A fund manager wants to claim GIPS compliance. Which of the following is a prerequisite before making this claim?
Answer: Adopting and implementing all required GIPS provisions firm-wide
GIPS compliance is a firm-wide obligation; a firm must adopt all required provisions before claiming compliance, though verification is recommended but not required.
Which of the following best describes the 'since inception IRR' (SI-IRR) metric commonly reported to private fund LPs?
Answer: The annualized return calculated from the fund's first drawdown to the current date using actual cash flows
SI-IRR is the money-weighted internal rate of return calculated from the fund's inception using all capital calls and distributions to date.
Under SEC Marketing Rule (Rule 206(4)-1), hypothetical performance presented to investors must include:
Answer: Policies and procedures for calculating and presenting such performance
The SEC Marketing Rule requires advisers presenting hypothetical performance to have policies and procedures governing its calculation and presentation.
An LP notice of withdrawal states a 90-day redemption notice requirement with a quarterly liquidity window. If an investor submits notice on February 15, what is the earliest redemption date?
Answer: June 30 (first quarter-end after a full 90-day period)
90 days from Feb 15 is May 16; the next quarterly window after that is June 30, making June 30 the earliest redemption date.
A fund's financial statements classify an investment in a private company using ASC 820's three-level fair value hierarchy. An input derived from observable market data for similar assets would be classified as:
Answer: Level 2
Level 2 inputs are observable market data other than quoted prices (Level 1), such as prices of similar assets or market-corroborated inputs.
What is the primary purpose of a fund's Confidential Information Memorandum (CIM) in the investor relations process?
Answer: To market the fund to prospective investors by describing strategy, team, and terms
A CIM (or PPM — Private Placement Memorandum) is the primary marketing document used to present the fund to prospective investors.
A limited partner exercises its 'key person' clause rights after the fund's lead portfolio manager departs. What is the typical consequence?
Answer: New investments are suspended until the GP satisfies the clause, often by naming a replacement
A key person event typically triggers a suspension of new investment activity until LPs vote to remove the clause or the GP installs a qualifying replacement.