RISK MANAGEMENT

Preemptive. Multi-dimensional. Institutional.


Comprehensive risk management has been the hallmark of Greenwich Alternative Investments for more than a decade. In addition to upfront due diligence, each fund is monitored and evaluated in a unique time-series format across three dimensions – portfolio level risk factors, market level risk factors and strategy relative performance.

Due Diligence
Professional due diligence is one of the best forms of risk management. GAI’s rigorous due diligence examines every aspect of the fund in detail including the investment process, operational controls, risk management and the investment team as well as legal and financial documents and performs external checks and validation.

Unique Time-series Risk Metrics
Our unique ‘time-series’ approach to risk management tracks changes over time across three dimensions of risk factors – Portfolio, Market and Strategy. This helps our Risk Management Committee proactively spot trends so that flags can be set into motion for further review prior to an actual breach in risk controls. GAI’s advanced ‘anticipatory’ approach to risk management is the result of years of hedge fund research and investing experience.

  • Manager interviews take place monthly where each fund is required to report various portfolio level exposures specific to the fund’s strategy such as leverage, position concentration, geographic exposure, liquidity and pricing.
  • Multiple risk factors including equity, bond, interest rate, commodity and currency exposures are analyzed to identify the degree of risk vulnerabilities depending on market conditions.
  • Performance that deviates from what might have been expected for a specific strategy during a given period serves as an important risk trigger. Individual funds are monitored relative to their strategy ‘norm’ to enable preemptive capture of fund risk/return characteristics, style drift and correlation breakdown.

 

GAI’s risk management balances quantitative with qualitative factors, viewing quantitative analysis as a valuable complement, rather than a substitute, for qualitative assessment. We regularly communicate with fund managers, prime brokers and administrators as another important source of risk assessment