Global risk management survey, ninth edition
Operating in the new normal: increased regulation and heightened expectations
Utilizing the ninth edition of Deloitte’s global risk management survey of financial services firms, we will explore investment management trends.
The investment management sector is diverse, comprising not only large and boutique stand-alone asset management firms but also subsidiaries of diversified banks and insurance companies. Depending on their structure, investment management operations can be subject to a variety of requirements imposed by regulators for the parent banking or insurance company.
Respondents from investment management firms were asked how their organization assesses investment risk. Performance attribution against a benchmark (97 percent) is by far the most common approach. Other measures are employed by half or more of investment management institutions: mandate breaches (72 percent), absolute return (69 percent), and Sharpe ratio (50 percent).
Investment management firms are typically strong in managing market risk since this is central to their business. Many are now addressing risk management areas where they may not be as strong, such as IT applications, data management, and oversight of the extended enterprise. Respondents were asked to rate how challenging each of a series of issues is for the investment risk management function in their organization.
Performance magazine issue 18, September 2015
Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.