Risk Management

A Fee Based Business

Institutional Equity Managers and Funds Managers, in general, need to quantify and manage risks across various asset classes as optimal portfolio asset management and sound risk management are intertwined.

Irrespective of whether an Institutional portfolio needs to be constructed in a beta-neutral way, to be protected against inflation and/or deflation, or a Private Equity portfolio to be hedged, Royce Equity Management consistently has helped our clients find a methodologically sound and practical solution.

We offer expertise in risk analytics and integration into a risk framework, risk technology, asset valuations, quantitative asset management as well as Alternative Investments. We help our clients to understand which Analytics are best suited for a client's needs and to find, develop and implement adequate tools for Risk Management. Proper analytical methods are the foundation of sound Risk Management. Understanding risk and measuring risk factors are keys to making risk tangible. Risk Management is much more than just crunching numbers. Risk Management should be forward-looking, pro-active and pre-emptive.

Risk Management covers a wide area of topics, from definition of a limit framework and stress tests, the creation of risk reports, measuring liquidity risk of hedge funds to gauging the risk and return potential of new trading strategies. The management activities involved in these engagements include asset/liability management, interest rate risk, equity portfolio risk, currency risk, and commodity price risk management. Software and information technology are pivotal for efficient and stable risk management processes.

The types of institutional clients include financial intermediaries, energy companies, agricultural concerns, public agencies, pension funds, mutual funds, banking and consumer finance corporations, and of course hedge funds.

The primary focus of these engagements has been the internalization of the on-going capability to make and implement portfolio management and risk management decisions in a consistent and disciplined manner.

The driving force of any effort to develop and implement an internalized portfolio management and risk management process is the conscious decision, by management, to proactively manage the performance profile created by the underlying assets, business and/or portfolio.

A Performance Profile, simply defined, is a graph depicting how the value, gain/loss, income, or cost of a business activity or portfolio changes as a result of changes in the associated asset prices, interest rate, or exchange rate. Regardless of the desired profile shape, and regardless of why that shape is desired, the key objective is to develop an explicit expression of the potential consequences our actions will have on the risks inherent in the resulting Performance Profile. We do this by integrating your risk profile with our Proprietary Risk Management software system.

The power and versatility of the our Proprietary Risk Management systems stem from a genesis as sell-side, enterprise-class applications originally developed to serve the demanding portfolio and risk management needs of some of the world's largest and most prestigious financial institutions.

Royce Equity Management can help Institutional clients and Private Equity clients build equity portfolios, fixed income portfolios and hedge funds with risk engines using our proprietary technologies. We can provide Front-to-back, Integrated Real-time Portfolio & Risk Management Software solutions.

For further information on how we can help you in specifying and managing your portfolio risk profile please Contact Us.

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