Hedge Funds: Are You Managing All The Risks?
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Hedge Funds: Are You Managing All The Risks?

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In the wake of the financial crisis, managing risk has become a critical issue for hedge funds. Today hedge fund managers must manage historical risks and new and emerging risks, as well as respond to ...

In the wake of the financial crisis, managing risk has become a critical issue for hedge funds. Today hedge fund managers must manage historical risks and new and emerging risks, as well as respond to a changing investor mentality and regulatory environment.

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Hedge Funds: Are You Managing All The Risks? Hedge Funds: Are You Managing All The Risks? Presentation Transcript

  • Are you managing all the risks? Hedge Funds: Copyright © 2013 Advent Software, Inc. All rights reserved.
  • This communication is provided by Advent Software, Inc. (“Advent”) for informational purposes only and should not be construed as or relied on in lieu of, and does not constitute, legal advice on any matter whatsoever discussed herein. Advent shall have no liability in connection with this communication or any reliance thereon. Copyright © 2013 Advent Software, Inc. All rights reserved. Advent and the ADVENT logo are registered trademarks of Advent Software, Inc. All other products or services mentioned herein are trademarks of their respective companies. Information subject to change without notice.
  • Managing risk is a critical focus for all fund managers. Copyright © 2013 Advent Software, Inc. All rights reserved. View slide
  • But hedge fund managers face historical risks emerging risks. as well as new Copyright © 2013 Advent Software, Inc. All rights reserved. Market Risk Credit Risk Liquidity Risk Reputation Risk Counterparty Risk Country, Currency, Political Risk Issuer / Name Risk Operational Risk View slide
  • What’s it take to manage that risk? 5 hurdles Here are to effective risk management. Copyright © 2013 Advent Software, Inc. All rights reserved.
  • Finding and reporting on The tendency of portfolio managers to work independently, combined with IT system limitations, can result in asset-class silos operating within a firm, making it difficult to obtain an accurate enterprise-wide picture of exposure. 1 firm-wide positions across asset classes. Copyright © 2013 Advent Software, Inc. All rights reserved.
  • Evaluating and quantifying 2 With trading speed constantly accelerating, evaluating the risk counterparties pose—and the resulting threat of defaults— at any given moment becomes a monumental undertaking. counterparty risk. Copyright © 2013 Advent Software, Inc. All rights reserved.
  • Reconciling data from various counterparties.3 Getting accurate data in a timely, automated fashion from a myriad of trading counterparties and back-office service providers can be difficult and time consuming. The firm then needs to reconcile the data received and address outstanding issues, further complicating the task. Copyright © 2013 Advent Software, Inc. All rights reserved.
  • Real-time data feeds, trade information and position monitoring are not always available, especially when dealing in emerging markets. real-time exposure reporting. 4 Copyright © 2013 Advent Software, Inc. All rights reserved. Difficulty getting risk and
  • Determining the fair value of an infrequently traded, custom-built OTC derivative or complex loan product can be problematic. Copyright © 2013 Advent Software, Inc. All rights reserved. Valuing securities and portfolios. illiquid 5
  • Overcoming these hurdles requires a robust and sophisticated technology architecture. Copyright © 2013 Advent Software, Inc. All rights reserved.
  • Copyright © 2013 Advent Software, Inc. All rights reserved. Once in place, your IT framework can enable a variety of key best practices including…
  • Value-at-Risk capability Copyright © 2013 Advent Software, Inc. All rights reserved. Real-time reporting Intra-day and more…
  • Learn more about Evolving Hedge Fund Risk and how to Create a Best Practices IT Framework. Download the free white paper from Advent Software. www.Advent.com/HedgeFundRisk Copyright © 2013 Advent Software, Inc. All rights reserved.