ALM Analytics

ALM and Risk Management Capabilities

Redington's ALM and risk management capabilities are widely regarded as best-in-class, reflected in its ranking as first, globally, for ALM / LDI Advice by Life & Pensions Magazine in 2009. We have developed and pioneered a set of powerful risk “lenses” to assess any proposed asset allocation or risk management strategy; this helps to determine the most efficient risk/return profile for the client, and doesn’t rely on a single and potentially misleading figure.

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  The Risk Telescope – Value-at-Risk (VaR) analysis calculates the chance of the fund finding itself with a serious shortfall problem in the future and, perhaps most importantly, provides insight into the component factors that contribute to these risks.

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  The Sensitivity Microscope – Sensitivity analysis examines the portfolio’s reactions to the slightest change in certain market or demographic factors, especially to the two biggest risks: interest rate and inflation.

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  The Scenario Kaleidoscope – Through this lens, we evaluate the portfolio’s vulnerability to unpredicted events. This is done to test the effect of individual stress factors (e.g. a shock to equity markets or inflation), but also for scenarios such as the Russian Crisis (1998), the Credit Crunch (2007/2008), or any other economic scenarios defined by the client.

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  Ongoing Monitoring – Our ALM risk engine provides a regular monitoring dashboard that allows the client to understand and manage risk. Constant monitoring is the way to tackle major problems before they arise.