Managing risk to target your desired outcome
We believe that understanding, monitoring and managing risk is critical to investment success.
Risk management is at the heart of our investment process and we have invested in ensuring that the most sophisticated techniques are used to monitor and manage portfolio risk across a full range of markets and specialist benchmarks.
Our specialist expertise and credentials have been recognised by trustees and advisers to many pension schemes and insurance companies resulting in appointments to run asset and liability risk management mandates incorporating interest rate and inflation hedging, active fixed income, absolute return and cash-benchmarked portfolios.
We also work with trustees and advisers to manage their equity exposure, often using equity derivatives. These enable our clients to manage their portfolio allocation more effectively whilst aiming to negate the downside risk of investing in equities by better matching the return on equities to their risk tolerance.
Our flexible solutions also allow clients to gain exposure to credit. This can be incorporated within the client’s overall risk management process to provide a closer hedge for their liabilities on an accounting basis whilst maximising the efficiency of their overall asset strategy.
Our proprietary risk management process enables us to act as a ‘risk allocator’ in combining our specialist capabilities so that we thoroughly understand, monitor and manage risk for our clients most effectively. Used at every stage of the solution construction, this process enables our portfolio managers to manage risk through bottom-up and top-down analysis across all asset classes.
We believe the most effective liability driven investment solutions are those that form part of an ongoing risk management process that is fully integrated into each scheme’s funding strategy. Our integrated solutions look to ensure that unrewarded portfolio risk is removed and our clients’ risk tolerance levels are used to exploit market anomalies that we expect to be rewarded. This enables us to add significant value by reducing the cost for the client of adopting a liability driven investment (LDI) solution.
