Performance & Risk Management
Goal: The investment process as a closed feedback loop.
Some stylized facts about the meaning of "risk" for an asset management company...
- Assets are "third party funds", meaning that losses are not the liabilitiy of the asset management company, but the client.
- If asset management companies are incurring "too many" losses, they will in the end loose the client.
- Losses typically do not have an immediate impact on the balance sheet of the asset management company
- Market risk is not a major concern, but operational risk (fraud, mismanagement etc.)
- Investment horizon in asset management ("Buyside") are much longer than in trading/dealing ("sellside")
- Buyside portfolios are often rather static
- There is a trend to consider relative risks (versus some kind ofo benchmark) rather than absolute risk (for example, volatility) for managed accounts.
Types of businesses...
1. Sellside
2. Buyside
Management Agreement Types:
mututal funds, managed accounts, advisory,
unmanaged, trusts, structured products
Client Types:
private banking, retail, institutional
Submenu
|
