Risk Management for Multistrategy Funds
As stated in Chapter 1, a multistrategy framework confers important advantages to a fund, among them the ability to exploit a wider range of market situations and integrate new credit instruments as they are developed. A multistrategy approach also presents risk management challenges.
This section will describe, in an abbreviated manner, a possible approach to meeting this challenge.
Within the credit subfund, the research, trading, and portfolio management functions are combined into a single credit team. This team approach provides a competitive advantage by aiding in the recognition of trading opportunities and the rapid structure and execution of trading strategies ...