Thu, Oct 2, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Commonfund white paper argues investors must address counterparty risk management

Wednesday, November 14, 2012

Beverly Chandler, Opalesque London: "Managing Counterparty Risk", a new white paper by David Belmont, Chief Risk Officer, Commonfund Group, argues that investors must address counterparty risk alongside their investment strategy and shows how investors can limit counterparty risk while executing their investments.

Analyzing MF Global, Peregrine Capital, and other counterparty failures, the paper argues that the financial system is no safer today than before the Credit Crisis and investors continue to incur counterparty losses with alarming frequency. The paper recommends that investors define their counterparty risk strategy at the same as they execute their investment strategy, and presents in-depth practical steps investors can take in order to minimize losses.

Belmont reports that findings show that while investors must accept a degree of counterparty risk in the investment process, they can minimize their exposures by frequently netting collateral, using market-driven indicators of counterparty quality, aggressively negotiating their agreements in detail, monitoring their exposures daily, diversifying counterparties, and structuring their investments as managed accounts. Alternatively, they can outsource their counterparty risk management by employing investment managers that have a strong counterparty risk management capability.

"Counterparty risk is a fact of life, and it is unpredicta......................

To view our full article Click here

Banner

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Legal - Court throws out lawsuits related to Fannie Mae, Freddie Mac profits, Insider case by SEC is a step removed from Herbalife itself, SEC grants Citigroup waivers, easing hedge-fund curbs[more]

    Court throws out lawsuits related to Fannie Mae, Freddie Mac profits From WSJ.com: A group of Wall Street investors on Tuesday suffered a blow in their attempts to sue the federal government over their treatment of the shareholders of mortgage finance giants Fannie Mae and Freddie Mac af

  2. Launches - Goldman Sachs Asset Management launches GS Long Short Fund, Western & Southern launching international hedge fund, Lansdowne Partners plans energy hedge fund, RBC Global Asset Management launches new RBC Funds (Lux) - Asia Ex-Japan Fund, PVE Capital latest credit strategy to launch on the Sciens managed account platform[more]

    Goldman Sachs Asset Management launches GS Long Short Fund From Marketwatch.com: Goldman Sachs Asset Management has announced the launch of the Goldman Sachs Long Short Fund, which pursues high conviction investment ideas in global equity markets through a fundamental, bottom-up approach

  3. M&A - Goldman fund takes stake in Caxton, Neuberger Berman acquires Orchard Square hedge fund, Top banks, hedge funds buy Perzo messaging platform for $66m[more]

    Goldman fund takes stake in Caxton From FT.com: Caxton Associates, one of the best known macro hedge fund managers, has sold a 9.9 per cent stake in itself to a fund managed by Goldman Sachs, according to a letter sent to its investors. The investment in Caxton, which manages close to $8

  4. Unconstrained bond funds: Where hedge fund strategies meet mutual funds[more]

    From CNBC.com: For all the talk and buzz around indexes, or passive investing, the next big thing for bond mutual fund investors may be strategies that are the exact opposite. The rapid growth of "unconstrained bond funds" has been thrust into investor spotlight given last Friday's stunning news tha

  5. Service Providers - Aequitas Capital launches exclusive provider network for independent RIAs[more]

    From Insurancenewsnet.com: Aequitas Capital, a diversified financial services company, has launched the Aequitas Financial Services Network (AFSN), a singular member network of select product and service providers who offer diverse yet complementary capabilities designed to empower Registered Invest