NEW YORK (HedgeWorld.com)–Taking advantage of demand for customized hedge funds of funds and transparency, Arden Asset Management is launching a new fund of funds initiative catering to large institutional investors.
The customized fund of funds will offer full risk transparency with comprehensive risk analysis and attribution reports. The reporting functions were built using the data aggregation and risk management technology of RiskMetrics Group, New York. Investors will get risk transparency information based on the full position data provided by underlying fund managers.
In turn, Arden is using RiskMetrics to conduct stress testing and scenario analysis of the fund of funds portfolio. Arden officials said that the RiskMetrics’ platform will not only complement the overall risk management process at Arden, but will not compromise the confidential nature of the underlying managers’ portfolios.
Fund of funds provider Tremont Advisers Inc.* also hired RiskMetrics last November to develop web-based risk reporting for hedge fund managers and investors.
“We have come to believe, based on feedback from large institutional investors, that there is a gap in traditional risk management and reporting for traditional portfolios,” said Henry P. Davis, managing director and member of the investment committee at Arden. “What this represents is a form of risk reporting that can be integrated with traditional long-only risk reporting programs.”