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From Sagar Chakraverty, Opalesque Asia:
See Part One of the article here.
In the second and third part of the video interview with Opalesque's founder Matthias Knab (part 2 here and part 3 here), Michael E. (Mike) Novogratz, the president of Fortress Investment Group (NYSE:FIG), focussed mostly on his outlook, Fortress' expansion plans, the future of alternative asset managers, and the possible convergence of traditional and alternative asset management businesses.
How does Fortress control risk?
According to Mike, there is a defensive measure to the mind-set of macro traders. They are all risk averse.
"We look at lot of risk measures, we look at volatility and VaR. Quite frankly, volatility and VaR work perfectly in a world where we are only trading liquid things that are freely marked and freely move every day. Outside that world, anything - a pegged currency, negative convexity, credit bet, short gamma portfolios (ideally, gamma of the portfolio should be neutral to protect the portfolio against wide fluctuation in share price), highly leveraged positions, relative value type stuff - volatility and VaR doesn't work for. You have to go through common sense approach. How much mone...................... To view our full article Click here
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