Monitoring Complex Investment Risks
A critical component to portfolio management
Risk management is a critical component of successful portfolio management. At HMC, we integrate risk management into the fabric of our investment strategy to protect the assets that we manage for Harvard University. The management team and the HMC Board devote substantial staff, time, and attention to managing the complexities that relate to the risks inherent in our portfolio.
Multiple forms of risk exist in any sophisticated investment strategy, including market, leverage, counterparty, and illiquidity. HMC continually reviews and revises the analytical functions by which we measure and control risk in the portfolio. Continuous improvement in risk management is critical in what remains an extremely volatile environment.
The risk tolerance of the University is a key component in our portfolio construction. HMC works closely with the University to understand appropriate risk parameters and align the endowment's risk/return profile with the University's goals and needs.