Global Risk Management Advisors – Flashcards
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Asset Management
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- The management of a client's investments by a financial services company, usually an investment bank. The company will invest on behalf of its clients and give them access to a wide range of traditional and alternative product offerings that would not be to the average investor.
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The Firm
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- the leading investment risk investment management advisory and implementation firm. - We develop and implement independent, institutional-quality risk management programs and solutions delivered as a cost-effective managed service, that enable our clients to fully address all of their internal and external risk management challenges and needs. - Nearly 60 clients ranging in size from $50 million to $88 billion AUM. Total client assets under advisory exceed $125 billion. - Founded in 2008.
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Mission
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- The mission of Global Risk Management Advisors, Inc. is to provide unparalleled, independent and institutional-quality investment risk management advisory and implementation services as a managed service to asset managers and institutional investors.
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Clients (Asset Managers)
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- Hedge Funds - CTAs/CPOs - Funds of Funds - Private Equity Funds - Long-only Managers
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Clients (Institutional Investors)
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- Endowments - Foundations - Pension Funds - Family Offices - Corporates - Hospitals
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The Team
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- Our risk management programs and solutions enable both asset managers and institutional investors to benefit from GRMA's best-in-class risk management team, composed of seasoned Chief Risk Officers, risk technologists, risk analysts and risk management compliance and investor transparency experts.
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Services (General)
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- We provide comprehensive risk management capabilities so that a fund or institution does not need to build an in-house risk management program itself. Alternatively, we can enhance a fund or institution's existing risk management capabilities by providing our expert assistance in areas where gaps may exist.
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Services (Asset Managers)
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- asset managers are under pressure to meet rigorous requirements for risk-related reporting and increased transparency from both regulators and investors. Institutional investors are demanding that asset managers be more institutional-quality, especially with regards to their risk management. - GRMA satisfies these significant challenges faced by asset managers by providing them with complete, independent, institutional-quality investment risk management managed services.
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Services (Institutional Investors)
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- GRMA assists endowments, foundations, pension funds, family offices and other institutional investors to develop and implement robust risk management programs that enable them to limit fiduciary risk and to meet best practice standards for risk management for institutional investors.
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Risk Infrastructure (AM)
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- assist asset managers to select, implement and maintain risk analytics software/systems. Develop and put in place other related vital risk management infrastructure, such as a data warehouse.
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Risk Measurement/Reporting (AM)
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- develop and provide customized risk reports and ad-hoc risk analysis on daily, weekly, monthly and intra-day basis. - GRMA's managed services is the most optimum and cost-effective solution for risk measurement and reporting because of our one of a kind B2B relationship with several leading risk analytic firms that enables asset managers not to have to purchase an annual software license, pay for market data and maintain internal staff to implement, run and maintain a complex risk analytic system.
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Risk Interpretation and Monitoring (AM)
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- provide funds with risk interpretation and risk monitoring essential for sound risk management as part of GRMA's managed services
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Risk Transparency/External Risk Reporting (AM)
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- provide funds with external risk reporting required for institutional-quality investor transparency (e.g. RiskMetrics HedgePlatform, Open Protocol, Monthly Investor Statements etc.)
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Limit Guidelines (AM)
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- develop and implement risk management limit guidelines.
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Policies and Procedures (AM)
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- develop and implement risk management policies and procedures.
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Transparency (AM)
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- assist funds to fully meet all risk-related regulatory, investor risk reporting and transparency requirements.
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Hedging & Trading Strategy (AM)
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- provide guidance on hedging, trading and portfolio strategies.
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Governance (AM)
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- develop and maintain sound governance for risk management.
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Best Practices (AM)
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- enable funds to meet or exceed best practice standards for risk management.
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Investment Policy Statement (II)
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- enhance an institution's investment policy statement so that it incorporates approach and overarching objectives for risk management in a substantive way.
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Risk Policy Guidelines (II)
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- determine specific risk parameters/thresholds that an institution can use for monitoring and managing its investment risks and utilize as the basis for risk-based asset allocation.
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Risk Management Processes and Controls (II)
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- develop risk management processes and controls so that risk management is actionable and integrated into an institution's overall investment processes (e.g. enhanced due diligence process, risk-based process for monitoring investments, redemptions and performing re-balancings).
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Risk Infrastructure (II)
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- assist to select, implement and maintain risk analytics software/systems for an institution.
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Portfolio Data Aggregation and Normalization (II)
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- provide complete services for portfolio data aggregation and normalization so that it can be analyzed using risk software/systems.
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Risk Measurement/Reporting (II)
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- develop and provide customized risk reports and ad-hoc risk and performance attribution analysis for the CIO, investment staff, the Board and the Investment Committee (monthly and quarterly risk reports and ad-hoc risk analysis). - GRMA's managed services for risk measurement and reporting are the most optimum and cost-effective solution for risk measurement and reporting because of our one of a kind B2B relationship with several leading risk analytic firms that enables institutions not to have to purchase an annual software license, pay for market data and maintain internal staff to implement, run and maintain a complex risk analytic system.
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Risk Interpretation and Monitoring (II)
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- provide institutions with risk interpretation and independent risk monitoring essential for sound risk management as part of GRMA's managed services.
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Sounding Board (II)
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- serve as a sounding board on risk management issues for Investment Committees and Boards.
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Education and Training (II)
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- provide education and training for investor's staff, Investment Committees and Boards on all investment risk management matters.
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Additional Services (II)
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- provide additional risk management services, including advising on and developing risk-based asset allocation, tail-risk hedging and risk overlay strategies.
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Thought Leadership
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- our principals have played leading roles in formulating industry best practice standards and advising policymakers and regulators over many years. We incorporate our thought leadership into everything we do for our clients.
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Independence
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- we offer independent, unbiased advisory and implementation managed services to develop and maintain a truly independent and effective risk management function, to provide independent validation of a client's risk management approach and processes, and to act as an expert and objective third-party on all risk management matters - both internally and externally.
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Extensive Experience
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- our principals each have 25+ years of front-line experience with all asset classes - on Wall Street, in the asset management industry and in the government.
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Tested Through Many Market Cycles
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- our principals have front-line practitioner experience in investment risk management through multiple market cycles, spanning more than two decades.
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Holistic Approach
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- GRMA's takes a holistic approach to risk management that enables our clients to have a sound, repeatable and sustainable risk and investment management process.
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Pragmatic and Cost-Effective Solutions
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- GRMA provides straightforward, practical, cost-effective and actionable solutions for the complex risk challenges that asset managers and institutional investors face today.
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Hedge Fund
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- Hedge funds are alternative investments using pooled funds that may use a number of different strategies in order to earn active return, or alpha, for their investors. - Hedge funds may be aggressively managed or make use of derivatives and leverage in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark) - Legally, hedge funds are most often set up as private investment limited partnerships that are open to a limited number of accredited investors and require a large initial minimum investment.
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Alternative Investments
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- An investment that is not one of the three traditional asset types (stocks, bonds and cash). - Most alternative investment assets are held by institutional investors or accredited, high-net-worth individuals because of their complex nature, limited regulations and relative lack of liquidity. - Alternative investments include hedge funds, managed futures, real estate, commodities and derivatives contracts.
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Hedge
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- A hedge is an an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. - There is a risk-reward tradeoff inherent in hedging; while it reduces potential risk, it also chips away at potential gains - Hedging is analogous to taking out an insurance policy
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Futures Contract
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- A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future - Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash
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Futures
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- A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. - The futures markets are characterized by the ability to use very high leverage relative to stock markets. - Futures can be used either to hedge or to speculate on the price movement of the underlying asset. For example, a producer of corn could use futures to lock in a certain price and reduce risk (hedge)
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Asset
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- A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
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Derivative
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- A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. - The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. - The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
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Credit
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- The amount of money available to be borrowed by an individual or a company is referred to as credit because it must be paid back to the lender at some point in the future.
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Family Office
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- Family offices are private wealth management advisory firms that serve ultra-high net worth investors. - Family offices are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of a affluent individual or family. For example, many family offices offer budgeting, insurance, charitable giving, family-owned businesses, wealth transfer and tax services
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Wealth Management
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- A high-level professional service that combines financial/investment advice, accounting/tax services, retirement planning and legal/estate planning for one fee. - Clients work with a single wealth manager who coordinates input from financial experts and can include coordinating advice from the client's own attorney, accountants and insurance agent. -Some wealth managers also provide banking services or advice on philanthropic activities.
