Institutional Investor's Alpha Magazine - November 2007 - (Page 55)

RISK MANAGEMENT Rank 2007 1 2 3 2006 4 2 1 Firm MORGAN STANLEY IMAGINE SOFTWARE RISKMETRICS GROUP MORGAN STANLEY Michael Richard, 47, Head of Prime Brokerage Analytics/Risk Management IF ANYONE KNOWS the Morgan Stanley risk management system, Michael Richard does. A Massachusetts Institute of Technology–trained electrical engineer, he was one of the system’s architects. The one he helped build at Morgan Stanley has exceptionally broad reach and is able to capture and assess just about any type of investment position, while providing enough flexibility to adjust to individual client needs. Yet, Richard views the role of his unit at Morgan Stanley as more advisory for hedge fund prime brokerage clients on portfolio and risk management issues than sales. “Our real focus is on helping hedge fund clients satisfy their portfolio and analytic needs,” says the 13year Morgan Stanley veteran. “And we also happen to have some technology offerings.” following of small to midsize hedge funds — the ﬁrm estimates that its average hedge fund client manages roughly $200 million in assets. Tradar also recognizes the importance of the reporting function. Over the past year the ﬁrm has beefed up its user interface to provide clients with more ﬂexibility in the creation of custom reports. “We can interface with just about anyone,” says CEO Anthony Swei, who has sought to keep the ﬁrm’s portfolio accounting system architecture as open as possible. SunGard Data Systems of Wayne, Pennsylvania, ranks No. 3 — the same spot it held last year. Advent Software of San Francisco places fourth, and Linedata Services rounds out the top five. Linedata, a French investment software company, acquired U.K. portfolio management system company Beauchamp Financial Technology in December 2005. RISK MANAGEMENT H ON THE WEB Visit www.alphamagazine.com to learn more about the Alpha Awards, as well as such other hedge-fundrelated features and rankings as Alpha’s 2007 Hedge Fund 100 list of the biggest single-manager hedge fund ﬁrms in the world. aving a strong risk management system and knowing how to best interpret it can play a major role in a fund’s performance — a fact that was highlighted during the summer’s market turbulence. When the markets plunged in August, risk exposure at many hedge funds soared. Some funds immediately sold off shares, only to have the market immediately rebound. “When we look back on August, we now know that the smartest thing some funds could do was sit on holdings, even though it was a risky proposition for them,” says Michael Richard, who oversees the New York–based risk management system Morgan Stanley offers its hedge fund clients. “That strategy played out for many who did hold but could easily have gone the other way had the market not recovered,” he says, noting that assessing risk is not a science. Morgan Stanley’s risk offering is the product of choice for hedge funds trying to monitor and manage their risk NOVEMBER 2007 • INSTITUTIONAL INVESTOR’S ALPHA • 55 http://www.alphamagazine.com

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - November 2007

Institutional Investor's Alpha Magazine - November 2007 Contents Letter from the Editor Longs & Shorts Pension Corner: Patriot State The Good Guys: College Connection Interview: Currency of Change Cover Story: Comeback Kid Strategies: Masters of Art Research Center: Alpha Awards: Top Technology Providers Top Analysts Alpha Bytes: Critical Choice Unhedged: Commentary: Banking on a Bubble

Institutional Investor's Alpha Magazine - November 2007

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