Structuring the Investment Risk Function

In this research, we focus on how investment management firms are structuring investment risk functions in their firms. We discuss the role of the function over product and portfolio management life cycles and share best practices on organisation, governance and tools that enable risk teams to balance potential returns with compliance and reporting requirements.

In the past, investment risk management for buy-side firms was traditionally a middle or back office function, with analysis conducted post execution. With the recurrence of uncertainty in the markets and lessons learned from the global financial crisis, risk management practices are now more prominent in the front office where firms are proactively monitoring exposures pre-trade alongside the dealing and portfolio management functions.

This research focuses on the following areas:

  • Shares insights and leading practices on how firms structure the investment risk function in their firms, including roles, responsibilities and reporting lines.

  • Examines how the risk management function impacts portfolio construction and investment strategy implementation.

  • Reviews solutions and services available in the market that support investment risk management and reporting.

  • Explores future trends on how the risk management function will evolve over the next several years.

Deliverables

A detailed research report on leading practices for structuring the risk management function in an investment management firm.

Target Audience

  • Senior staff responsible for risk, compliance and investment decisions

  • Senior operations and IT staff responsible for front office operating models and costs

  • Firms interested in deepening their knowledge on this topic and exchanging ideas with industry peers