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SEI links with RiskMetrics to improve hedge fund risk reporting

SEI Investments, an alternative investment fund service based in Pennsylvania, has teamed up with New York-based risk analytics company RiskMetrics in a bid to solve the discrepancy between investors seeking accurate risk reporting from hedge funds and the unwillingness of hedge funds to divulge proprietary trading positions.

The pair plan to provide multiple levels of risk reporting for single strategy and fund of hedge fund managers, which should particularly appeal to pensions, plan sponsors and endowments.

"Currently, most risk reporting is opaque and difficult to assess," said Stephen Meyer, head of the alternative investment managers unit at SEI Investments. He believes the combination of RiskMetrics' risk management tools and SEI Investments’ back-office and processing engines should help clients better manage portfolios and help other funds invest in hedge funds.

"As institutions continue to increase allocations to hedge funds they are making it clear that in-depth due diligence and return-based analysis should be augmented with position-based risk assessments,” added Gordon Yeager, head of alternative investments at RiskMetrics.

SEI administers $241 billion in mutual fund and pooled assets, manages $78 billion in assets and processes almost $50 trillion of investment transactions annually. RiskMetrics was spun-off from JP Morgan in 1998.

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