Press Releases
Riskdata releases breakthrough stress test to support hedge fund investors
July 29, 2004
Riskdata, the leader in risk management solutions for funds of hedge funds, has launched the first risk management solution capable of simulating the impact of historical crises on hedge funds, whatever the level of underlying transparency. According to Raphael Douady, Riskdata Director of Research, the Risk Profiling technology in Riskdata FOFiX represents a breakthrough in crisis risk management for Hedge Fund investors.
Dr. Douady commented: “For hedge fund investors a key issue in risk management is simulating the potential damage if a historical crisis were to recur. Investors want to know, ‘What could be the impact on my portfolio of hedge funds if a major event, like the 1998 LTCM collapse or Russian crisis, were to occur today?’ Traditional methods require simulating these shocks on current portfolio positions, an approach already available in Riskdata FOFiX, but these methods face serious limitations. For example, they cannot be applied to the many hedge funds that do not expose their portfolio positions. Portfolio analysis can be compromised if only one or two managers do not provide current position data."
“Traditional simulation methods do not take into account the dynamic strategies of hedge fund managers, such as stop-loss rules. And, often, they do not integrate the change in market liquidity that usually accompanies a crisis.”
According to Dr. Douady, the breakthrough Risk Profile methodology in FOFiX overcomes these limitations:
“Risk Profiles provide investors with significant insights into the risks in their fund of fund portfolios when it matters most, in times of extreme market stress. Risk Profiles integrate hedge fund strategies and the change in market behaviour under extreme conditions. Importantly, Risk Profiles require only the record of hedge fund returns.”
Olivier le Marois, CEO of Riskdata, added: “With more institutional money flowing into hedge funds, there is increased pressure on funds of funds to provide even greater risk transparency and value-added. The most critical component of this transparency is clarity on hedge fund behaviour under extreme market circumstances, especially those related to major macro-economic events. FOFiX responds to this demand, producing clear, readable stress test and crisis reports, covering 100% of the fund of hedge fund portfolio, whatever the level of underlying positional transparency “
About Riskdata
Riskdata’s team includes investment practitioners, risk management experts and I.T specialists. Its aim is to offer money managers easy, interactive and intuitive access to effective risk analysis. It is supported by leading figures, such as Professor Robert Mundell, a past winner of the Nobel Prize for Economics.
Riskdata is the first service offering a daily view on all market classes: equities, fixed-income, listed and OTC derivatives. As an interactive system, rather than classic ASP model, there is no exporting of clients’ positions while deployment is quick and simple.
Riskdata offers a comprehensive suite of solutions for Asset Managers, adapted to all investment styles: FOFiX for Fund of Funds, HEDGIX for Hedge funds, along with dedicated products for benchmarked funds.
For further information:
Press:
Fishburn Hedges
Andrew Marshall
Florencia Panizza
Tel: +44 20 7839 4321
andrew.marshall@fishburn-hedges.co.uk
florencia.panizza@fishburn-hedges.co.uk
Sales: info@riskdata.com
Sales Contact:
Riskdata
Joelle Hadida
+ 33 1 44 54 35 06
info@riskdata.com
“The challenge for us was to get an aggregated view of the fund risk profile while tracking the specific risk of each underlying strategy. We think Riskdata is able to address both of these issues simultaneously. Moreover, we can monitor the impact of any portfolio allocation on the fund risk profile.”
Philippe Uzan,
CDC IXIS Multi-Strategy Fund
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