Risk Management

In order to effectively assess risk, OAIM splits risk management into two parts investment risk management and operational risk management.

Investment risks - key factors

The investment team focuses on the below five factors at both the manager level and the overall portfolio level and is assessed in two separate states of the world; normal market conditions and stressed market conditions.

• Directional risk: to market factors such as equities or commodities; divided into structural and tactical exposure.
• Dependency risk: degree to which performance is dependent on certain conditions to perform.
• Liquidity risk: ability to move the portfolio around in response to market conditions.
• Concentration/correlation risk: directional, dependency and liquidity risk.
• Total risk: an assessment of all of the above and an appreciation of how it is composed.

Tools: quantitative risk management is performed using Bloomberg and bespoke applications.

The objective of the dedicated operational due diligence team is to form conclusions regarding the soundess of potential managers in key risk areas:

• People
• Control
• Valuation
• Technology infrastructure
• Regulatory requirements
• Service providers and counterparties

The following areas strengthen OAIM’s approach to operational due diligence: Detailed reference checks conducted by third party and via network Detailed on-going monitoring program.

The team has a strict ‘no invest’ policy with respect to red flag issues. Further, the COO has the right to veto investments.