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Improving risk governance
We provide institutional-quality risk framework design and harmonised portfolio risk-reporting services, customised to specific client needs. These are particularly suitable for investors that may not have a large internal team available for risk analytics but wish to enjoy the portfolio management and governance benefits provided by a sophisticated risk management function.
An effective top-down risk management framework strengthens governance. It enables the investor to establish a common view of risk and objectives, set and manage appropriate and actionable risk limits, improve portfolio diversification, inform reallocations of capital between strategies/managers and control downside risk.
Actionable insight
Risk reports are produced on a monthly or quarterly basis, depending on the needs of the investor. The reports are designed to be management and board-appropriate, designed around the specific priorities of those stakeholders. Findings are presented in a way that enables effective oversight and decision-making, including clear “alerts” on potential problems.
Analysis is based on a proprietary framework which enables investors to understand the risks within their portfolios, the origins of those risks and how they change through time. A factor-based methodology is used to dissect portfolios–at total-portfolio level, asset class level, strategy level and manager level–into their fundamental risk drivers. The framework is designed specifically to avoid the pitfalls of a pure historic ‘look-back’ risk analysis. It employs Monte Carlo simulations, factor-based covariance and scenario analysis to provide a deeper insight into ‘what could happen’, opposed to ‘what did happen’. The model has been published in the European Journal of Finance (Goodworth & Jones, 2007).
Latest case studies
Policy and Strategic Asset Allocation support
The client, a Middle-Eastern financial institution, sought support for reviewing and creating its...
Risk Management Framework
This Middle Eastern family office engaged bfinance to design an inaugural risk-management...
Risk exposures, diversification and absolute return
The client engaged bfinance Risk Solutions to provide holistic portfolio risk reporting, following...
Latest insights from the team
What our clients say
Working with bfinance is key for us to reach as many managers as we could. We are not able to do this due diligence on our own.
I will mention the rigor of their search. I haven’t seen it with any other companies, no one has bfinance’s thoroughness in their process.
The bfinance team were incredibly helpful in refining our need to have a better understanding of fee and cost trends. They provided high quality data and, more importantly for us, expert analysis and advice on likely trends.
