We aim to optimise all of our portfolios’ risk-return profiles. As well as seeking out the investments with the best return prospects, this also involves carefully monitoring and managing risk. The way we do so differs for our long-only portfolios and our funds of hedge funds.
Long-only portfolios
- Each investment team’s process involves disciplined risk management
- Our portfolio managers input all trades in our portfolio management systems (e.g. thinkFolio, Charles River), which run pre-trade compliance checks. All trades must also be validated by the custodian bank
- The custodian checks fund performance with that of a wide group of peers
- Our Risk Management team runs a monthly check on each portfolio
Funds of hedge funds
- Risk is analysed at the underlying manager, strategy and overall portfolio levels
- Our Chief Risk Officer has overall responsibility for monitoring all risks associated with investments, asset allocation, portfolio management, manager research and operational risk management
- Our main information system is Measurisk, which provides Monte Carlo value at risk analysis, stress testing and modelling of equities, fixed income, FX and derivatives
- Independent operational risk management team with power to veto investment in any hedge fund
