Our rigorous approach ensures risk is integrated into the investment process and enables us to capitalize on market opportunities. Our focus on optimal capital allocation and emphasis on actively measuring, monitoring and managing risks across our portfolios strengthens our approach.
Disciplined capital allocation is critical to providing a framework for successfully pursuing opportunities across the energy commodity complex while generating long-term performance. The capital allocation process focuses on optimizing the portfolio subject to skill, diversification contribution and analysis of qualitative characteristics across different strategies.
Advanced Risk Framework
We invest in the latest trading and risk management technologies to continuously enhance CCI’s risk management infrastructure. The team utilizes its proprietary risk systems and employs rigorous methodologies to aggregate risk, identify idiosyncratic risk factors and measure the degree of diversification across the platform. Continuous review of modelled stress scenarios and risk concentrations throughout changing market dynamics and proactive, dynamic tail risk management to reduce risk concentrations and limit firm-wide exposure play a critical role in the structure of our risk framework.
Independent Risk Management Team
The risk management team is independent and reports directly into the CEO. The team consists of market experts working proactively with business leaders to provide solutions throughout the life cycle of the trade, and a dedicated analytics team creating custom tools to bolster risk analysis. Pre-trade and intra-trade discussions serve to increase the transparency of the distribution of potential outcomes and provide analysis during changing market conditions to ensure strategies are focused on current market dynamics. Ex-post analysis serves to evaluate the skill of each risk taker and opportunities which provides data for the capital allocation process.
Disciplined Risk Culture
Synthesizing quantitative and qualitative performance metrics is key to maximizing returns and achieving sustainable, long-term value creation. The risk management team independently evaluates qualitative performance metrics, including the quality of the idea generation process and the ability of risk takers to construct portfolios with asymmetric payoffs, manage risk and deploy/redeploy risk capital responsibly and effectively. Identifying gaps in these areas, working to improve the gaps and sharing best practices across the firm ensures that there is a culture of excellence and accountability.