Beyond handling day to day operations and budget for Verger at the firm level, the Operations Team is responsible for monitoring Verger’s investment performance and preparing the results to be communicated with our investors and stakeholders.
While a key Operations Team goal – preparing an accurate valuation of investor holdings – might sound simple, it is quite a detailed and involved process.
Monitoring the “Perform” pillar
Verger’s Operations Team members are the stewards of a detailed process with five layers of reviews, checks, and balances. Before performance data makes its way to our investors, it undergoes the following checks:
- Verger’s Fund Administrator tracks and reviews daily portfolio transactions of Verger Capital Fund and reports them to Verger.
- Verger reviews and approves the administrator’s reports on a monthly basis, compares the results to internal expectations, and asks questions of the administrator or external fund managers as necessary.
- Verger’s independent auditor performs a separate financial statement audit twice per year, in June and December.
- Verger and its independent auditor present the audit results to the Audit and Compliance Committee of Verger’s Board of Managers for each audit.
- Verger undergoes an annual, independent verification process in order to claim compliance with the Global Investment Performance Standards (GIPS)1.
We sat down with Shubham Dingane, Jeff Manning, and Tricia Walker of the Operations Team to learn more.
Client custom accounts
Verger is proud of our ability to offer clients the Verger Capital Fund along with complementary, custom accounts, and we’re proud that both undergo a similar program of checks and balances outlined above.
In the case of Verger’s custom, separate accounts, which are designed to meet clients’ specific needs and objectives, Shubham handles the first layer of checks and balances by reviewing daily portfolio transactions and reconciling information.
“It is an honor to serve as the first checkpoint in this series of reviews,” Shubham shared. “For our custom accounts, our database maintenance processes are unique and cannot be completely automated. This means that, at times, I need to partner with the operations teams at our external fund managers to verify information. I enjoy collaborating with the external fund managers and reporting my findings to my team.”
Two of the five Operations Team checks and balances center around Verger’s biannual financial statement audit. The audit is a vital part of Verger’s commitment to clients and represents the accumulation of a year’s worth of work. The Operations Team sees the audits as important moments to engage with broader Verger leadership and lean into accountability. “We are fortunate to have a dedicated and detail-oriented Board of Managers, and we value the interactions with their Audit and Compliance Committee,” Jeff shared. “The audit presentations are an opportunity for a productive dialogue.”
Jeff also noted that there is always time on the agenda for Verger team members to leave the room and allow the Board to discuss the results directly with the auditor, in private. This is an important feature of providing the Board with the ability to make an independent assessment of the results.
An additional layer of verification
After the June audit is complete, Verger undergoes the final layer of checks and balances, which is a voluntary process to annually claim compliance with the GIPS standards. These standards are not only globally recognized as the standard for industry best practice in investment performance reporting and presentation, but also associated with continued commitment to evolving alongside industry changes and developments.
For example, Tricia was recently selected to be a member of a CFA Institute working group focused on developing universal GIPS standards for OCIOs. “Given the unique model of OCIO firms, the GIPS Standards Technical Committee is interested in evolving the standards to ensure reporting is consistent across OCIOs. Right now, clients or prospective clients looking to compare performance across OCIO firms have a difficult time reconciling very different reports,” Tricia shared. “I am honored to represent Verger, and I see my role as especially important, given Verger is a relatively small firm with exclusively non-profit clients. I aim to amplify Verger and our clients’ voices.”
In choosing a firm to annually verify Verger’s ability to claim compliance with the GIPS standards, it was important to Verger that the expertise and experience with this niche topic ran deep. Verger works with the Performance Division of ACA Group, which is the largest team of professionals in the world solely devoted to GIPS standards verification and related services.
“It would have been easy to engage the independent auditing firm we already work with for GIPS standards verification. But we at Verger are proud to make what we feel is the right choice, not the easy one,” Tricia shared. “Having a separate, independent body verify our performance reporting adds an additional layer of checks and balances to our process.”
Understanding client needs
In talking with our Operations Team members, it is clear that they are passionate about stewarding this process with the ultimate goal being to help further the mission of our non-profit clients. Indeed, Verger’s non-profit roots help us understand what it’s like to sit in our clients’ seats. Members of the Operations Team have previously served parallel roles within the University Office of Investments at institutions including Wake Forest and Cornell.
“We understand the audit processes our clients undergo, and we are especially well equipped to help them address specific questions or develop language for their communications with stakeholders,” Jeff shared.
Verger understands the care and effort that is required behind the scenes to make a simple goal like preparing an accurate valuation a reality, and we appreciate our clients’ staff and Board members, who have their own internal layers of audit process they are responsible for.
1 To receive a list of composite descriptions of Verger Capital Management, LLC and/or a presentation that complies with the GIPS standards, please contact us and indicate your inquiry is regarding the GIPS standards.