Risk Management for Alternative Investments

Alternative investments offer the opportunity to capture alpha with correspondingly sophisticated layers and levels of risk. At BlackRock, we support our alternative investments managers with the highly developed risk management resources of our global firm. We want our clients to be fully informed about their portfolios’ risk characteristics and to have confidence in our unwavering commitment to monitoring that risk on their behalf.

Investment risk
Liquidity risk
Operational risk
Organisational risk

We believe that risk in every portfolio should be deliberate, diversified and appropriately scaled. Our layered view of investment risk encompasses primary (market), secondary and idiosyncratic risk.

We manage risks across the liquidity spectrum in keeping with the nature and requirements of various alternative strategies.

We assess and monitor internal controls and conduct extensive due diligence on all potential investments. We have extensive experience in negotiating, managing and diversifying counterparty risk via our Counterparty & Concentration Risk Group.

We evaluate the structure, stability and quality of potential investments and consider factors such as capacity risk, asset base and underlying investor base.