Risk Transparency

Providing Transparency is more important than ever, but what exactly does “transparency” mean?  Funds want to provide different levels of transparency, depending on their strategies and structures.  Investors demand different levels of transparency as well.  IA’s technology is built to satisfy all of these needs.

Position-based risk transparency in summary

IA’s risk analytics can be calculated from the underlying positions without revealing a single security or holding.  We use the security-level information to calculate the risk statistics without revealing which securities are held.  We then aggregate the risk analytics through the desired structure, again without showing the lowest level of detail: the position.  This method works well in providing full, position-based risk analysis while respecting the manager’s need for secrecy.

Position-based risk transparency in detail

Of course, IA can reveal the positions/holdings to any party with the appropriate credentials. The investor can view a report in summary, while the fund’s risk manager can see all the details.

Factor-based risk transparency

All of IA’s risk analytics can be calculated without access to the underlying positions by performing advanced mathematical analyses on the fund’s returns (see our Risk Driver analysis).  By identifying the most significant drivers of the portfolio’s risks, IA can provide synthetic transparency.