SEI Investments has formed a strategic partnership with RiskMetrics Group to provide risk analytics to the hedge fund industry. The two companies say they are working together to provide multiple levels of risk reporting for single strategy and fund of hedge fund managers.
SEI says the relationship is aimed at nurturing the growing institutional interest in alternative investments, particularly by pension funds, pension fund plan sponsors and endowment funds, in the expectation that increased comfort for them will preserve a greater degree of freedom of action for hedge fund managers.
“Currently, most risk reporting is opaque and difficult to assess”, says Stephen Meyer, Head of the Alternative Investment Managers unit at SEI Investments. “Risk management remains a critical component of what institutional investors want from fund managers. Integrating RiskMetrics’s market-leading risk management tools into our best-of-breed back office and processing engines gives our clients a powerful advantage in managing their portfolios as well as attracting investors.”
Gordon Yeager, Head of Alternative Investments at RiskMetrics Group, added: “As institutions continue to increase allocations to hedge funds they are making it clear that in-depth due diligence and return-based analysis should be augmented with position-based risk assessments. The ability to aggregate this position-based risk across funds and strategies is essential for multi-manager portfolios. Combining our industry leadership in risk measurement with SEI’s expertise in fund administration and business solutions gives us an opportunity to add significant value to hedge fund managers and investors alike. Using SEI’s solution, alternative investment managers will continue to receive the high caliber processing services and investor servicing SEI has traditionally offered, yet also have state-of-the-art risk analytics integrated into their online or print reporting package. This will give managers better tools in attracting investors and growing their business. Offering this risk management platform is a logical step for SEI in our ensuring we are the provider of choice to the alternative investment fund community.”
Originally a division of JP Morgan, RiskMetrics Group became independent in 1998. It provides financial risk measurement analytics to banks, central banks and companies. The company is headquartered in New York City, with seven offices worldwide, including London, Tokyo and Singapore.