Risk Management as the Key Source of Added Value in Investment Management
Investment management in the new era can be defined as the art and science of efficiently spending institutional or individual investors’ dollar and risk budgets to help them achieve their meaningful goal-driven objectives (for individuals) or liability-driven objectives (for institutions), subject to a number of regulatory constraints or otherwise. Whatever the context, meaningful investment solutions are in fact invariably based on three fundamental sources of added value, each reflecting one particular form of risk management technique : (1) the use of an efficient risky performance-seeking portfolio (PSP); (2) the use of an efficient safe liability-hedging or goal-hedging portfolio; and (3) the use of an efficient allocation strategy for efficient risky and safe building block portfolios.
Diversification
The risky portfolio should be efficient at harvesting risk premia across and within asset classes: It’s all about diversification!
Hedging
The safe portfolio should be efficient at matching risk factor exposures on the asset and liability sides: It’s all about hedging!
Insurance
The allocation to the efficient risky and safe portfolios should secure investors’ essential goals while generating a high probability of achieving their aspirational goals: It’s all about insurance!
Academic Roots
EDHEC Bond Risk Premium
Bayesian Nets for Stress Testing
EDHEC Risk Expertise
ESG Factors and Sustainable Investment Solutionst
"Flexicure" Retirement Solutions - A part of the Answer to the Pension Crisis?
Practitioner Reach
Ostrum Bond Portfolio Optimization
Results of the 12th EDHEC European ETF Smart Beta Survey
News
29-06-2020
30,000 People Already Enrolled to Increase Their Skills in Python and Machine Learning
Investment Management with Python and Machine Learning Specialisation
This highly innovative programme was designed by Professor Lionel Martellini, Director of EDHEC-Risk Institute, in collaboration with Professor John Mulvey of Princeton University, as well as asset-management experts and EDHEC research associates.
Data science is revolutionizing the asset-management industry, but...
24-06-2020
Professor Daniel Mantilla-Garcia is...
Taking into account his trajectory and experience in the matter, CCADI has appointed Prof. Daniel Mantilla-Garcia, EDHEC PhD (2011), Assistant Professor of Finance at the Universidad de los Andes and...
15-06-2020
EDHEC rated among the world top 5...
EDHEC Business School reasserted its position as one of the leading Masters in Finance in this global ranking.
Rated 5th alongside globally prestigious universities such as HEC, MIT and Bocconi,...
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Citations in worldwide trade publications
520
Papers published
2 500
Participants trained
100 000
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About EDHEC
Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.
