Risk Management for Pension Funds and Endowments

Abstract

Earlier this year, I was asked to speak at a luncheon for holders of the Financial Risk Manager professional designation who worked for pension funds and endowments. After my remarks, a discussion ensued in which it became clear that there was no consensus on best practice for how to be a risk manager in these types of organizations. The principles of modern financial risk management were developed in proprietary trading organizations; and later adapted first to commercial banking, then to investment banking and finally to agency asset management — that is, the business of managing money for others in return for a fee.