Sat, Dec 3, 2016
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. M&A - AllianzGI to acquire Sound Harbor Partners, SS&C completes acquisition of Wells Fargo's Global Fund Services business[more]

    AllianzGI to acquire Sound Harbor Partners Allianz Global Investors (AllianzGI), an active investment manager, announced that Sound Harbor Partners, a US private credit manager led by Michael Zupon and Dean Criares, have agreed to join its fast-growing Private Debt Platform. Under the te

  2. Europe - UK investors to pay more tax on money in offshore funds, Do you want to hand your money to super-algo or a Swiss banker?[more]

    UK investors to pay more tax on money in offshore funds From FT.com: Hedge funds in Dublin and Luxembourg are set to be hit by new rules that will force UK investors to pay more tax on the money they hold in offshore funds. As part of the government’s Autumn Statement on the country’s fi

  3. Hunt for yield pushes more investors into riskier assets[more]

    From FT.com: Pension funds and insurance companies have increasingly embraced riskier assets in their hunt for higher returns over the past five years. Alternative assets such as property, infrastructure, private equity and hedge funds have been bought up by institutional investors in a world where

  4. People - Nectar Financial hires senior investment team, Texas A&M replaces retiring foundation investment chief, Ex-Cadwalader partner Woolery makes another sudden exit, How to become a Python coder at a top hedge fund, by the co-CTO of Man AHL[more]

    Nectar Financial hires senior investment team Nectar Financial AG, a Swiss financial technology company for wealth and asset management, has announced that it has hired two key senior leaders to spearhead its digital asset management efforts. The company also announced that it has entere

  5. Activist News - Cognizant has introductory discussion with activist investor Elliott; to review letter, Starboard Value makes huge investment in Hewlett Packard, Hedge fund calls for removal of First NBC Bank CEO[more]

    Cognizant has introductory discussion with activist investor Elliott; to review letter From Indiatimes.com: Cognizant said it had an introductory discussion with Elliott Management after receiving the activist hedge fund's letter asking for a board shakeup, a buyback, a dividend and chan