What portfolio reporting and performance attribution should a multifamily office provide?
A multifamily office should provide a clear report that connects results to the family’s policy, benchmarks, fees, risk, liquidity, and decisions. Show time-weighted and money-weighted returns when relevant. Explain performance through allocation, selection, and interaction effects. Every figure needs a stated method, period, benchmark, and source.
Core portfolio reporting
Start with a one-page summary. Show beginning and ending value, net cash flows, contributions and withdrawals, total return, gain or loss, fees, and the period covered. Separate public markets, private investments, cash, real estate, operating businesses, and other material exposures. Show both the strategic policy allocation and the actual allocation. Add a variance column so the family can see where exposure moved from policy.
Use a benchmark that matches each mandate. Label every benchmark clearly. If a custom benchmark combines several indexes, disclose its components, weights, and calculation method. GIPS guidance emphasizes clear benchmark descriptions and relevant calculation disclosures. CFA Institute, GIPS Standards
Report returns before and after fees, with the fee definition stated. Use time-weighted returns to assess manager decisions when the manager does not control external cash flows. Use money-weighted returns when the timing and size of family cash flows are part of the investment result. Label each method and show the cash flows used.
Include volatility, drawdown, liquidity, unfunded commitments, and concentration. These measures help the family judge whether results fit its policy and spending needs. Keep estimates separate from reported custodian or administrator data. A consolidated view also depends on consistent data definitions and disciplined reporting processes across providers.
Performance attribution
Attribution should answer three questions: did policy allocation help, did security or manager selection help, and did the combination of weights and selections help? A standard Brinson framework separates excess return into allocation, selection, and interaction effects. CFA Institute, Performance Attribution
Show attribution at the total portfolio level, then by asset class, strategy, manager, sector, or security when the data supports it. Reconcile every effect to the portfolio’s excess return. Explain large contributors and detractors in plain language. For private assets, report realized gains, unrealized changes, income, fees, leverage, valuation changes, and cash flows. Do not present a false level of precision when valuations are infrequent.
A useful report also records decisions. Link major allocation changes, manager hires or terminations, hedges, liquidity actions, and tax-related cash movements to the period’s results. This creates an audit trail for the investment committee and the family.
For a formal institutional format, applicable GIPS guidance describes reporting of annual performance over at least five years, building to ten years when available, along with benchmark returns and other disclosures. Depending on the reporting framework, it may also address assets, portfolio counts, dispersion, and three-year annualized ex post standard deviation. CFA Institute, Overview of the GIPS Standards
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