Fri, May 27, 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. Paul Tudor’s hedge fund trims fee amidst poor performance, keep investors[more]

    Komfie Manalo, Opalesque Asia: Paul Tudor’s $11.6bn hedge fund firm Tudor Investment Corp. announced on Monday it would slash down fees of one of its biggest fund to 2.25% of assets and 25% of profits amidst backlash arising from poor performa

  2. Ares Capital to buy American Capital in $3.4 billion deal[more]

    From PIOnline.com: Ares Management's business development company Ares Capital Corp. is buying troubled BDC American Capital for $3.43 billion, said a joint news release by the BDCs and another release by Ares Management. Ares Capital Corp.'s assets are expected to grow to about $13.2 billion when t

  3. Performance - Hedge fund ETFs take a battering, Have long-short credit funds delivered?[more]

    Hedge fund ETFs take a battering From ETFStrategy.co.uk: It was a blow for the hedge fund world when Hillary Clinton’s son-in-law Marc Mezvinsky announced he would be closing his Greek-focused fund after it plummeted in value by 90%, just two years after it launched. For passive investor

  4. Launches - Man Group and American Beacon launch new emerging debt fund, Nikko AM launches new Japan equity UCITS fund[more]

    Man Group and American Beacon launch new emerging debt fund American Beacon Advisors, an experienced provider of investment advisory services to institutional and retail markets, launched the American Beacon GLG Total Return Fund today. The Fund became effective May 20. The America

  5. Emerging markets hedge funds perform strongly, but capital base erodes[more]

    Komfie Manalo, Opalesque Asia: Latin American Emerging Markets and Russian hedge funds lead industry gains in the first months of 2016, posting strong performances through April as global and EM equity, commodity and currency markets surged in recent weeks following steep losses to begin the year