Asset Classes

Risk management is a key part of our process

Our internal risk control function focuses on two distinct areas:

1. Fund risk

While the fund manager is responsible for monitoring fund risk on a daily basis, he is supported by our team of portfolio analysts, who produce a variety of risk control reports on duration, currency and yield curve positioning. Our independent risk management team is also charged with the constant monitoring of fund risk and informing the fund manager if the fund at any time breaches agreed risk parameters.

Our dedicated portfolio risk team has global oversight responsibility for the risk management of all balanced, equity and bond portfolios. The team works in partnership with fund managers to ensure the level of risk in any investment is appropriate to the potential return, and assists fund managers by simulating the effect on risk measures of different portfolio actions.

2. Guideline risk: the potential to breach a client’s agreed guidelines.

Fund managers do not have the discretion to deviate from Investment Management Agreement portfolio constraints. The purpose of signing an Investment Management Agreement is to define a set of investment guidelines upon which both fund manager and client agree. We have a dedicated Guideline team that ensures that any breaches are investigated immediately.

The team relies on a post-trade compliance system that generates daily reports. Where a guideline is breached, it is brought to the attention of our compliance team which is responsible for deciding, in conjunction with the respective fund manager, what corrective action should be taken. Latent Zero provides pre-trade guideline-compliance checks for most of our portfolios  

Process Steps