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In the wake of the financial crisis, managing risk has become a critical issue for hedge funds. Today hedge fund managers must manage historical risks and new and emerging risks, as well as respond to a changing investor mentality and regulatory environment.
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Are you managing
all the risks?
Hedge Funds:
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This communication is provided by Advent Software, Inc. (“Advent”) for informational purposes only and should not be construed as or relied on in lieu of, and does not constitute, legal advice on any matter whatsoever discussed herein. Advent shall have no liability in connection with this communication or any reliance thereon.
Copyright © 2013 Advent Software, Inc. All rights reserved.
Advent and the ADVENT logo are registered trademarks of Advent Software, Inc. All other products or services mentioned herein are trademarks of their respective companies. Information subject to change without notice.
Managing risk is a
critical focusfor all fundmanagers.
Copyright © 2013 Advent Software, Inc. All rights reserved.
But hedge fund managers face
historical risksemerging risks.
as well as new
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MarketRisk
CreditRisk
LiquidityRisk
ReputationRisk
CounterpartyRisk
Country, Currency,Political
Risk
Issuer /NameRisk
OperationalRisk
What’s it take tomanage that risk?
5 hurdlesHere are
to effectiverisk management.
Copyright © 2013 Advent Software, Inc. All rights reserved.
Finding and reporting on
The tendency of portfolio managers to work independently, combined with IT system limitations, can result in asset-class silos operating within a firm,
making it difficult to obtain an accurate enterprise-widepicture of exposure.
1 firm-wide positionsacross asset classes.
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Evaluating and quantifying2
With trading speed constantly accelerating, evaluating the risk counterparties pose—and the resulting threat of defaults—
at any given moment becomes a monumental undertaking.
counterparty risk.
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Reconciling datafrom various counterparties.3
Getting accurate data in a timely, automated fashion from a myriad of trading counterparties and back-office service providers can be difficult
and time consuming. The firm then needs to reconcile the data received and address outstanding issues, further complicating the task.
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Real-time data feeds, trade information and position monitoring are not always available, especially when dealing in emerging markets.
real-timeexposure reporting.
4
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Difficulty getting
risk and
Determining the fair value of an infrequently traded, custom-builtOTC derivative or complex loan product can be problematic.
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Valuingsecurities and portfolios.
illiquid5
Overcoming these hurdles requires a
robust and
sophisticatedtechnology architecture.
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Copyright © 2013 Advent Software, Inc. All rights reserved.
Once in place, your IT framework can enable a variety of key
best practicesincluding…
Value-at-Risk capability
Copyright © 2013 Advent Software, Inc. All rights reserved.
Real-time reporting
Intra-day
and more…
Learn more about Evolving Hedge Fund Risk and howto Create a Best Practices IT Framework.
Download the free white paper from Advent Software.
www.Advent.com/HedgeFundRisk
Copyright © 2013 Advent Software, Inc. All rights reserved.
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