GRACE - ORM for Operational Risk Management in Alternate Investment Organizations and their Service Providers

Capital introduction in the current environment is one of the biggest challenges the hedge fund industry faces. Investors are increasingly looking for higher transparency in operations and disclosures. Sound Operational practices in organizations and implementation of best practices in risk management are becoming necessary for being selected for investments. There is a higher value being placed on safety over return on investments.

As is seen by the industry, stringent due diligence is being conducted by institutional investors with very detailed questionaires being sent to them to them. Organizations that are not sound on their operational processes will be left in a difficult situation of not being able to raise capital.

The Ponzi schemes, insider trading cases and other frauds on investors have led to the regulatory authorities conducting more frequent and stringent examinations of the firms at short notice.

These changes are forcing all players whether it is the hedge fund, fund of hedge fund, broker / dealers, registered investment advisors, or service providers like hedge fund administrators, custodians to ensure that their operational processes are sound.

Regulatory examinations and audits want to see that firms:

  • Have comprehensively assessed their risks and have an inventory of all the current risks including operational, regulatory compliance, legal, reputation, credit, counter party, liquidity, leverage, financial and strategic risks.
  • Have mitigation strategies in place for the identified risks.
  • Shows adherence to defined policies and procedures for risk management.
  • Keep policies and procedures up-to-date.
  • Provide adequate and timely disclosures to investors to enable informed decision making with regards to the fund's risk profile and performance relative to its defined strategy.
  • That risk Management is an firm-wide and repeatable process.

GRACE-ORM for Operational risk management is a web based software solution based on the Managed Fund Association’s (MFA) Best Practices 2009 ,President’s Working Group (PWG), the Alternate Investment Management Association (AIMA) definitions for operations and SEC's Examination Focus Document 2009.

We also offer web based GRACE-CCO for compliance monitoring that can help you build your compliance monitoring program at the transactional level. Together with GRACE-ORM , it can help you build up the total organization Governance, compliance and risk management process and present a unified repository for audits and regulatory scrutiny. It can be bought together with GRACE-ORM or as a separate product based on your need. GRACE-CCO addresses the needs of Hedge Funds, Fund of Hedge Funds, Broker/Dealers.

GRACE-ORM is offered in SaaS (Software as a Service) model to enable you to implement quickly. You could also choose to use the soluion in-house if you choose to.

GRACE-ORM offers specialized Risk Management in Operations for:

GRACE-ORM can be used as hosted service and as in-house solution. Pricing is modular and you can choose and pay for the modules you need.

Automating the processes for planning, execution & reporting risk assessments, control self assessments, audits, internal controls monitoring, operational reporting, loss events and incident management

Automating risk reporting and escalation to provides early awareness of issues

Powerful dashboards that can drive tracking, analysis, & real-time reporting

Deep drill-down and extensive business analytics

Ensures risks do not fall through cracks

Risks are identified and mitigated in a standardized way through the firm

A current inventory of risks and their mitigation status is available at all times

All the related policies and procedures are in place and are updated

Internal controls are tested and issues that come up are addressed

There is a standardized work flow process for review and agreement and communication in the organization

All activities are audit trailed

Information can be provided as proof during audits and examinations without much manual effort to produce the information

There is a single source of truth for all documentation

Provides segregation and rights management so access to information is only limited based on user's right

Provide assurance to your investors of the soundness of your operational process

Provides senior management the assurance that they are doing their fiduciary responsibilities

Allows you to be ready for audits and examinations

Gain competitive advantage with investors by proving best practices in risk management