Independent risk monitoring service launched
04 February 2004 | 1303 views | 0
Independent Risk Monitoring Limited has been launched with the twin aims of cutting risk-management costs and improving the effectiveness of portfolio monitoring for asset management companies. The service is to be provided by a new firm, founded by Peter Jeffreys, co-founder of Fund Research Limited, and Yves de Naurois, formerly Head of Global Investment Process at Citibank Private Bank, Geneva and Luxembourg.
Independent Risk Monitoring Limited will monitor a portfolio's adherence to its declared investment mandate, benchmark and risk profile. For collective funds, Independent Risk Monitoring Limited will ensure that UCITS III regulatory guidelines are met with respect to risk management. These include the mandatory introduction of a dedicated risk management process to enable managers and directors of UCITS III regulated funds to monitor and measure the risk profile of portfolios at all times.
The service has equal application for the managers of segregated portfolios and will provide an additional, independent layer of comfort and reassurance for directors, trustees and guardians of such portfolios where a risk management process is already in place.
Commenting on the launch of Independent Risk Monitoring Limited, Yves de Naurois Managing Director states: "Independent Risk Monitoring Limited believes that regardless of the diversity and uniqueness of each portfolio manager's style, a best-practice oversight standard - anchored in in-depth appreciation of the risk management process - will emerge as a consequence of increasing regulatory pressure. Independent Risk Monitoring Limited service will provide a highly cost-effective solution for this increasingly complex challenge and will complement existing risk management processes by improving the identification of a portfolio's divergence from either mandate or benchmark."
Peter Jeffreys, Director adds: "Independent Risk Monitoring Limited will provide qualitative analysis on top of a quantitative, exception-based analytical process. We have developed a proprietary exception-based process which provides daily monitoring of all portfolio constituents and immediate identification of major risk violations. It also detects any significant change in investment approach."
In addition to Yves de Naurois and Peter Jeffreys, Independent Risk Monitoring Limited's founding directors are: Norman Riddell, Chairman (non-executive), CEO of Norman Riddell & Associates, and formerly CEO of Invesco Europe; and Colin Morrison, Director (non-executive), Head of Performance & Risk Measurement at Standard Life Investments, and member of the IMA working party on Performance & Risk Measurement.