Investment Performance Risk - Deep Dive into Leverage

Why Should You Attend:

Portfolio management is becoming more and more complex. Breaking down, understanding and managing the elements that can generate investment performance risk is critical. An investment portfolio over its life is managed in many different economic and financial environments and the elements producing risk to a portfolio must be managed in the context of these varying environments. In addition, investors are frequently introduced to individual structured investments and hereto, an investor must be able to dissect and understand the risks of a standalone investment and correctly evaluate the risk/return profile of the investment.

This presentation examines investment performance risk from the perspective of the investor and from the perspective of the money manager. Investment performance risk is a multifaceted subject and it must be understood as to the causes of investment performance risk, the degree of risk present, the consistency of risk with an investor’s return objectives and the consequences of inappropriate or misunderstood levels of investment risk.

Areas Covered in the Webinar:

• Understanding Investment Risk
• Absolute risk
• Relative risk
• Establishing Performance Benchmarks
• Evaluating Investment Performance from the Perspective of:
• The investor
• The money manager
• Establishing Investor and Money Manager Relationships
• Discretionary
• Non-discretionary
• Causes of Investment Performance Risk
• Elements increasing risk
• Consequences of Investment Performance Risk
• To the investor
• To the money manager
• Review of Leverage
• Definition
• Identification
• Degree of leverage
• Creating leverage

Who Will Benefit:

• Investors
• High net worth individuals
• Private bankers
• Money managers
• Mutual fund board trustees
• Risk managers
• Compliance managers
• Auditors
• Regulators with investment oversight responsibilities
• Universities and colleges with business and investment management curriculum in their degree programs

Robert Geary
Founder , Greenwich Risk Management Advisory Services LLC

Robert Geary is the founder of Greenwich Risk Management Advisory Services, LLC, and serves as the principal consultant on many of the firm’s consultancy mandates. He has been a banking and finance industry professional for 41 years and has spent 34 years with JP Morgan Chase & Co in various roles pertaining to senior treasury, financial market, asset management and risk management.

Earlier in his career, Mr. Geary managed Chase Manhattan Bank’s Euro and other offshore funding activities and was the bank’s first Asia/Pacific area treasury and financial markets executive located in Hong Kong. There for five years, he had overall functional management responsibility for the treasury, currency trading/sales activities and securities portfolios of Chase’s branches in nine countries in the region that included the major centers of Japan, Hong Kong and Singapore.

He has served on the board of directors of Chase Manhattan Overseas Banking Corporation as well as on numerous senior committees that included Chase’s Portfolio and Investment Strategy Committee, Tax Committee, International Asset/Liability Management Committee, Chase Investment Policy Committee, and Capital Markets & FX Risk Management Committee. Prior to joining Chase, he held positions at Chemical Bank, Chrysler Financial Corporation and National Bank of North America. Mr. Geary holds a BA degree in economics from Pace University and did graduate studies in finance at New York University Graduate School of Business. He is also currently a member of the Executive Advisory Board of St. John’s University Department of Accounting and Taxation.

Topic Background:

All investors and money managers know that investing has risks. A primary aspect of investing is managing investment performance risk and doing so in the context of one’s return objectives.

An investor managing one’s own investments must understand the various risk generating aspects of one’s portfolio and the contribution they are targeted to make with respect to the return of the portfolio. The investment performance risk and return objectives of a portfolio should be viewed within a defined timeframe that is extended on an ongoing basis.

When employing a money manager to manage one’s investments it is equally important that the risk elements to be present and employed in the management of a portfolio be well defined, confirmed in guidelines and be consistent with the investor’s portfolio performance objectives reflect a portfolio’s performance benchmarks.

One of the elements of investment performance risk is the presence of leverage. The use of leverage can be an important means of enhancing the return of a portfolio, but it can also dramatically increase the risk of a portfolio. Leverage is frequently a misunderstood investment management concept and this presentation will provide an in depth look of leverage with respect to the understanding of leverage, its identification and measurement and the methods by which leverage can be created.

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