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By Beverly Chandler, Opalesque London:
A new study has found that an increasing allocation to alternatives has put transparency and risk control top of the agenda for institutions employing external managers. MSCI’s Back to the Future of Risk Management survey of global asset owners for 2011 surveyed 85 institutions during the May – August 2011 period. Respondents were typically CIOs, CROs, Portfolio Managers, Senior Risk Analysts and Middle Office heads and were all asset owners, working at a public plan, a corporate plan, an endowment, foundation or a sovereign wealth fund. Asset owners came from 26 countries and fell into a bracket of managing assets of between $10 billion and $50 billion.
MSCI’s findings included finding a new 'paradigm shift’ in the risk management function as more resources are dedicated to the management and measurement of risk. The report finds that: "Several participants hired a CRO, risk team or additional analysts over the past few years. The role of the risk manager has been elevated within the plan structure and is now a formalized part of the investment process. Communication between risk managers and the Board and investment teams is more frequent. The 2011 survey results show clear progress in system development for monitoring market, counterparty, liquidity, credit and active manager risks, often at the total plan level."
There has also been an increase in dynamism for investment horizons and asset allocation selection. "Although ...................... To view our full article Click here
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