Risk management is an essential part of the management process.
It is composed of 3 parts:
- The first level of risk control is a common sense check. We perform a fund’s positions daily questioning in order to confirm that reasons for purchase are still actual.
- We use a wide range of assets: equities, rates, volatility, currencies. According to our understanding of the macroeconomic and financial situation, we arbitrate between those assets classes based on their expectations of performance, their intrinsic risk and their diversifying nature.
- Within the same class, an in-depth analysis of the factors influencing the change in an asset prior to its introduction into the portfolio allows us to know to what extent it is decorrelated to the rest of the positions.