Risk-Based Investment Management in Practice

Surely managing investments is a matter of taking calculated risks to give the best chance of a decent return?

But how does it work in practice?

Written by a practitioner with 30 years in investment management, both as portfolio manager and as Chief Risk Officer, Risk-Based Investment Management in Practice provides a comprehensive, jargon-free account of modern investment management, with a focus on how investment risk affects the decisions of professional investment managers. The book begins with the fundamentals of fund structures, investment objectives and strategy, and then moves on to disentangle portfolio selection practices and how effective risk management adds value, sorting out:

- how investment risk is different from risk in banks
- how investment risk models work - and sometimes don't work
- what risk reports actually tell you - and what they do not
- what value derivatives can add to performance and how and why they can unravel
- how to differentiate genuine skill, from outcomes that are just lucky.

Written in a practical and accessible way, the book addresses the key challenges of modern risk based investment management, and will appeal to investors of all levels as a guide and reference to this important area.

Frances Cowell has worked in professional investment management since the early 1980s, as research analyst and portfolio manager for public and private pension funds. During this time she worked with leading practitioners and academics in investment risk management to apply established investment theory and defensive use of derivatives to practical investment management challenges in order to deliver defined investment outcomes for pension and retail funds across asset classes.

For the last 15 years she has specialized in investment risk management for multi-asset class portfolios, specialist portfolios, and for in-house managed hedge funds.

She is currently Director of Risk Consulting for R-Squared Risk Management and is a founding director of the London Quant Group.

PART I: INTRODUCTION
1. Introduction
2. Risk-Based Portfolio Selection - An Overview
3. Investment Management Theory
PART II: RISK MANAGEMENT
4. Risk Management
5. Risk Modelling
6. Risk Measurement
7. Derivatives Risk Management
PART III: RISK-BASED PORTFOLIO SELECTION
8. Asset Allocation
9. Indexed Equities Portfolios
10. Equities Portfolios
11. Optimization for Equity Stock Selection
12. Fixed Interest Portfolios
13. Credit Portfolios
14. Property Portfolios
15. Structured Products
16. Hedge Funds and Funds of Hedge Funds
PART IV: PERIPHERALS
17. Implementation
18. Performance Measurement and Attribution
19. Trends in Investment Management
Appendix 1. Pricing Interest Rate Securities
Appendix 2. Forward Contracts
Appendix 3. Futures Contracts
Appendix 4. Swaps
Appendix 5. Options
Appendix 6. Convertible Notes