Respect for risk

To complement our desire to foster our fund managers' freedom, New Star maintains a control framework that goes beyond merely satisfying regulatory requirements. The company has rigorous risk and control processes and has established a compliance and monitoring regime that is central to its operating philosophy.

 

Operational risk relating to the investment of client portfolios is minimised in a number of ways. Firstly, within our investment process we have segregated the roles of individuals such as fund managers, dealers and back office staff to ensure accountability and transparency of operations. Secondly, we have developed in-house systems with the aim of avoiding breaches of mandate particulars.

 

Portfolio risk is formally monitored by the Portfolio Risk Committee (PRC), which comprises representatives of the investment team and the business managers. This group ensures that any breaches of agreed risk parameters are addressed in a timely and meaningful manner. The PRC is supported and supplemented by our performance and risk team, which is wholly independent of the investment team and reports directly to our compliance director. This team provides the investment team and the PRC with all necessary data including BARRA, Style Research data.

 

We believe we have struck the optimal balance between risk control and investment manager freedom.