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Kristin M. Fox

The autumn of 2008 well may go down as The Great Fall of the financial system, as the broadmarket indexes and three storied U.S. financial institutions collapsed and the masterminds of previously unfathomable Ponzi schemes, Bernard Madoff and Alan Stanford, were exposed for lining their own pockets with billions of dollars of other people's money.

2009 issued in a new era, with the financial game re-set to zero and all previous bets were off. What worked a year ago or even 10 years prior didn't ring true anymore. It was time for change. Faith in the system was gone and somehow even the safest seeming things could no longer be trusted.

Risk became the new key word as everything was suddenly at risk. Systemic risk. Trading risk. Operational risk. Too-big-to-fail risk. Headline risk. Risk tolerance Risk intolerance. But the biggest issue of all for investment managers and investors became "How do I take my risk off the table?"

Hedge funds, which traditionally were viewed by the consumer press as deep murky pools of risk to begin with, borrowed a page from the corporate culture and began hiring chief risk officers. This begs a number of questions, including what is a chief risk officer at a hedge fund and can he really take risk off the table? What can he do that a portfolio manager or chief investment officer can't?

In the last year the headlines in the trade press have announced that many large hedge funds, including BlueCrest in London, have......................

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