When the ESMA requirements came into force in 2020, Varenne Capital sought out a provider for regular liquidity stress testing, to reinforce risk oversight and transparency.
Clarus Risk generates liquidity risk metrics via its RiskMonitor® Liquidity solution and online platform. This incorporates analysis of investor behaviour as well as asset risk scenarios to provide a comprehensive asset and liability appraisal in a board and investor friendly format.
Market, political and regulatory pressure to increase transparency and substance means many investment managers opt for an external solution for liquidity stress testing which has many benefits, from enhanced analytics and flexible reporting through to time and cost savings.
Clarus Risk’s team work with Varenne Capital's chosen depositary, INDOS Financial, to source fund asset and liability data which fed into our RiskMonitor liquidity solution. Our end-to-end report process meant the reports can be completely automated, acting as an invisible glue between the administrator or depositary and the investment manager. The solution incorporates analysis of investor behaviour as well as asset risk scenarios to provide a comprehensive asset and liability appraisal in an investor friendly format.
David Mellul, Managing Director of Varenne commented, “Strong risk management and corporate governance are key pillars of our responsible investment policy and our chosen independent depositary and risk service providers are now able to reinforce our risk oversight and transparency through their collaboration and the provision of regular liquidity stress testing”.
Bill Prew, CEO of INDOS Financial added “The new ESMA liquidity stress testing guidelines came into effect at a challenging time for the funds industry due to the on-going impact of COVID-19 on operations and financial markets. Through this partnership with Clarus Risk, INDOS is now able to facilitate independent liquidity stress testing for its clients in an efficient way, reducing their operational burden and enabling them to demonstrate compliance with the new requirements”.
Max Hilton, Managing Director of Clarus Risk added “The ESMA guidelines are principal based which brings subjectivity and complexity to the implementation of an appropriate solution. This fits well with our RiskMonitor® platform which is designed to facilitate client and fund specific risk reporting that aligns with the risk tolerance and underlying asset mix of each fund. This partnership with INDOS brings new operational efficiencies to the benefit of our clients”.
See below the announcement of our partnership:
Varenne Capital Partners Selects INDOS Financial – INDOS Financial | JTC (indosgroup.com)
