Luc Neuberg and François Petit: Writing the Book on Risk Management
Paul Kleinbart, François Petit, Luc Neuberg, Martin Vogt
In financially turbulent times, risk management is a critical topic for European investment funds. With this book (Risk Management for Investment Funds), the authors aim to improve practice across the industry. Interview with Luc Neuberg and François Petit.
Why write this book and what is it about?
The book is a practical guide that describes the context and methods of risk management for European investment funds. As incredible as it may seem, such a book did not exist before. It took the gathering of four motivated authors to explore this vast subject. This motivation comes from our professional involvement in the field, on both the industry side and in an academic dimension. We started from the beginning by recalling the characteristics of funds, their main strategies, the parties involved in their management and the regulatory framework in which they operate. The compliance of the risk management system with the applicable legal provisions is indeed a priority for fund managers. Then some practical methods and techniques are described and illustrated with examples.
“Recent events have again shown that risk management is a key element in the strength of the financial system.”
What is the target audience?
The risks to which funds are exposed can impact all the players in the fund industry. Risk management, therefore, is important at all levels from governance to back-office operations. The book thus targets all the players in the fund industry, not just risk managers. Everyone should know at least the basics of risk management and be aware of the risk management process.
After this first joint book, what are the next steps?
We have a contractual commitment with our publisher to provide a new edition of the book every three years. That said, this commitment is not our main motivation for already working on the second edition. Indeed, our book, which to us appears to be rather complete to date, will evolve over the development of the concerns of IFMs in terms of risk management. Sustainability risks, cyber risk, risks related to private assets and due diligence risks are examples of topics that we would like to develop further in the second edition. This would certainly meet the frequent expectations of risk managers. Luc, we heard about a specific initiative which capitilises on the book… I am taking advantage of the momentum created by the book to launch a certification program in risk management for investment funds. This program will enable players in the investment fund industry to prove the level of their knowledge in the field of risk management. The program targets fund administrators, investment fund managers, risk managers and all the other players in the fund industry. Recent events have once again shown that risk management is a key element in the strength of the financial system. The certification will be attributed based on the successful completion of an exam the content of which is derived from the reference book. The first session will take place at the end of 2023 to give the first participants sufficient time to prepare. Detailed operational information about the program will be published in a few weeks.