Alternative investment managers grapple with fragmented risk data, inconsistent technology capabilities across business lines, and the difficulty of stress-testing portfolios across multiple market scenarios, according to Brett Morrell, Head of Risk Solutions at Derivative Path.
As fund sizes grow, investments become more complex, and investor expectations rise, firms need solutions that provide a holistic, real-time view of exposures while seamlessly integrating with their existing workflows, he said.
“Many traditional risk tools lack the agility to address derivatives exposure, liquidity stress, or counterparty credit risk with the granularity required in today’s market,” he told Traders Magazine.
In today’s rapidly evolving financial landscape, alternative investment managers face a multitude of challenges when it comes to managing risk. The market has become increasingly complex, driven by volatility, geopolitical risks, and evolving regulatory requirements.
In this environment, firms need advanced, real-time tools that can provide a comprehensive view of their risk exposure, especially as fund sizes grow and portfolios become more sophisticated.
“Firms now require dynamic, data-driven risk solutions that adapt in real-time. The shift toward scenario-based forecasting, AI-driven analytics, and cloud-based risk platforms reflects this evolution,” Morrell commented.
“Today’s investment managers need more than historical data—they require forward-looking insights that stress-test portfolios against shifting macroeconomic trends and idiosyncratic risks,” he stressed.
In response to these challenges, the financial industry is embracing more dynamic, forward-looking solutions.
Derivative Path’s newly launched Risk Dashboard is designed to meet the needs of alternative investment managers who rely heavily on derivatives for hedging or strategic positioning.
Unlike traditional risk management tools that focus on static reporting, the Risk Dashboard provides a real-time view of exposures, offering insights into interest rates, foreign exchange (FX), and counterparty risks. It integrates seamlessly with existing trading and accounting platforms, offering a holistic portfolio view that is both intuitive and actionable.
“The Risk Dashboard empowers managers to eliminate unnecessary market risks, align risk oversight with core systems, and deliver investor-ready insights – all within one dynamic platform. It’s purpose-built to monitor key risks such as interest rate risk, FX risk, counterparty risk, and liquidity risk,” Morell said.
He explained that the Risk Dashboard provides: Real-time visibility into interest rate, FX, and counterparty exposures; Ability to link hedges with underlying exposures; Scenario-based stress testing with market-driven assumptions; Seamless integration with trading and accounting platforms for a holistic portfolio view; and Intuitive, user-friendly interface designed for front-office and risk teams alike.
The Risk Dashboard is purpose-built to monitor and manage: Interest rate risk; Foreign exchange risk; Counterparty risk; and Liquidity risk. “While the current version is optimized for interest rate and foreign exchange exposures, future iterations will expand to additional asset classes as client demand involves,” Morell said.
He further said that the Risk Dashboard is designed with API-first architecture, allowing seamless integration with: Trading platforms for real-time position updates; Core accounting systems for automated risk reconciliation; Market data providers to enrich analytics with external pricing feeds; and Regulatory reporting tools for streamlined compliance.
“This ensures that investment managers can operate with a single source of truth, reducing operational risk and enhancing decision-making,” he said.
According to Morell, despite the benefits of advanced risk management tools, firms often face challenges such as: Data fragmentation – Risk data is often siloed across trading desks, finance teams, and third-party vendors, making integration complex; Legacy system compatibility – Many firms still operate on outdated infrastructure, requiring significant upgrades to adopt modern solutions; User adoption – Front-office teams may resist new technology if it disrupts existing workflows. An intuitive, user-friendly interface is critical for successful adoption; and Regulatory complexity – As global rules evolve, risk tools must adapt to new capital, liquidity, and reporting requirements.
“Derivative Path’s Risk Dashboard is specifically designed to address these barriers by providing seamless integration, flexible deployment options, and a highly intuitive user experience that reduces onboarding friction,” he concluded.
