Thu, Apr 26, 2018
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

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. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

  5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

    Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its