Fof Risk Management

The document discusses risk management strategies for funds of funds in the aftermath of the 2008 financial crisis. It emphasizes the importance of accurate risk measurement, including calculating simple statistics like returns, volatility, and value at risk. However, it notes that more advanced analysis is needed, including peer group analysis, regime switching analysis to understand performance in up and down markets, and accounting for non-normal distributions when calculating value at risk. Effective risk management requires establishing policies, procedures and infrastructure tailored to each firm's operating model and needs.