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To remain competitive, asset managers, hedge funds, private banks, wealth managers and family offices have been trying to modernize certain aspects of their investment operations. Although the industry gets more sophisticated by the day, there are remaining gaps and challenges in identifying the various investment risks which are often hidden from the untrained eye.
The evaluation of a portfolio’s overall risk exposure to normal or Black Swan market conditions cannot be adequately described by a single risk statistic. Instead, it requires the deployment of a selection of risk metrics and calculation methodologies, to ensure that the risk that one assumes to produce a performance, complies with given investment policy criteria.
Over the past decade, there has been a marked increase in the number of regulations and reporting requirements present in the financial sector. As a result, compliance is now one of the most important aspects of every hedge fund’s daily activities.
When discussing hedge funds, many people focus on investment strategies and potential profits. However, it is also very important to consider risk management. The right operational control allows hedge fund managers to safeguard the finances and satisfaction of their clients. Why is operation control so valuable for hedge fund management?