Few investors set risk budgets.

Financial News, April, 2002

Only 14% of hedge funds and 19% of funds of funds have had "risk budgets" assigned by investors, according to a risk management summary released by Alternative Investment Management Association (Aima).

Aima commissioned Capital Market Risk Advisors to conduct its first review of fund of funds investing due for release in the summer 2002. As part of this, a series of surveys was issued to investors, fund of funds and hedge funds to question them on issues such as risk management. The first one on transparency is already out.

Risk budgets are the risk limits an investor is prepared to take. Some 27% of investors say they have assigned "risk budgets" to their funds and 7% are studying the idea.

Only 43% of funds of funds that rely on managers to...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.