May 21, 2024

The results of participating Benchmarking firms' investment risk practices.

The investment landscape has undergone significant change since we conducted our last Investment Risk survey in 2020. The COVID-19 pandemic, geopolitical issues, and the inflationary environment, just to name a few, highlight the ever-present investment risks. At the same time, new investment risks have surfaced. Climate risk and managing alternative asset risk ─ or including alts as part of a multi-asset class model (MAC) ─ now pose significant risk management challenges. For the purposes of this study, ex ante investment risk management includes market, credit, counterparty, climate, and MAC risks, as well as the data, technology, and resources dedicated to a firm’s risk management practice. While operational risk plays an important role in a firm's overall risk management efforts, it employs methods and calculations that do not typically affect portfolio management. For these reasons, we have not included operational risk in this study. This study identifies several key issues that relate to your firm’s risk management and best practices aimed at addressing these issues.

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