Hedge fund risk management

• US 8,069,105 B2
• Filed: 06/17/2003
• Issued: 11/29/2011
• Est. Priority Date: 03/20/2001
• Status: Active Grant

• Current Assignee: Regulatory DataCorp, Inc. (Moody's Corporation)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Lawrence, David
• Primary Examiner(s): Patel; Jagdish N
• Assistant Examiner(s): POE, KEVIN T
• Application Number:
  US10/464,168
• Publication Number:
  US 20030236742A1
• Time in Patent Office: 3,087 Days
• Field of Search: 705 35- 41
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A computerized method and system for managing risk associated with a Hedge Fund is disclosed. Information relating to Hedge Funds is gathered and stored as data in preparation for a risk inquiry search relating to a Hedge Fund. Documents and sources of information can also be stored. A subscriber, such as a Financial Institution, can submit a Hedge Fund descriptor for which a risk inquiry search can be performed. The risk assessment or inquiry search can include data retrieved resultant to augmented retrieval methods. Scrubbed data as well as augmented data can be transmitted from a risk management clearinghouse to a subscriber or to a proprietary risk system utilized by a subscriber, such as a risk management system maintained in-house. Risk inquiry searches can be automated and made a part of standard operating procedure for any transaction conducted by the subscriber in which a Hedge Fund is involved.

Claims

1. A computer-implemented method for managing risk associated with a Hedge Fund, the method comprising:

gathering, by a computer, data relevant to a Hedge Fund from multiple sources;

aggregating, by the computer, the data gathered according to regulatory and reputational risk variables;

generating, by the computer, a certification of the aggregated data including a list of risk parameters associated with the Hedge Fund, the list of risk parameters being derived from the aggregated data and representative of a granularity level of aggregated data analysis;

receiving, via a user interface, a risk assessment inquiry relating to the Hedge Fund;

generating, by the computer, a risk quotient for the Hedge Fund by conducting data research on the certification including the list of risk parameters;

searching, in response to the received risk assessment inquiry, the aggregated data for data portions related to the Hedge Fund and associating the data portions of the aggregated data with the Hedge Fund by the computer; and

generating, by the computer, a report including an indication of the certification, the risk quotient, and the data portions of the aggregated data associated with the Hedge Fund.

2. The method of claim 1 wherein the gathered data is gathered exclusively from publicly available sources.

3. The method of claim 1 wherein the inquiry comprises a sponsor of the Hedge Fund.

4. The method of claim 1 wherein the inquiry comprises a partner of the Hedge Fund.

5. The method of claim 1 wherein the inquiry comprises a domicile of the Hedge Fund.

6. The method of claim 1 wherein the inquiry comprises investments made by the Hedge Fund.

7. The method of claim 1 wherein the inquiry comprises a commodity pool operator as defined in the Commodity Exchange Act.

8. The method of claim 1 further comprising transmitting the associated portions of the aggregated data by the computer, including when the transmitting is conditioned upon receipt of the contractual obligation not to use the associated portions of the aggregated data for facilitating compliance with the Fair Credit Reporting Act.

9. The method of claim 1 wherein the inquiry relates to Hedge Fund window dressing.

10. The method of claim 8 wherein the associated portions of the aggregated data is transmitted exclusively to an institution, such that the transmitter will have neither customers nor consumers as defined in the Gramm-Leach-Bliley Act.

11. The method of claim 8 wherein transmitting the associated portions of the aggregated data is conditioned upon receipt of a contractual obligation to limit use of the aggregated data for complying with regulatory and legal obligations associated with at least one of:

(i) the detection and prevention of money laundering, (ii) fraud, (iii) corrupt practices, (iv) organized crime, and (v) activities subject to government sanctions or embargoes.

12. The method of claim 8 wherein transmitting the associated portions of the aggregated data is conditioned upon receipt of a contractual obligation to limit use of the aggregated data for at least one of:

(i) the prevention or detection of a crime, (ii) the apprehension or prosecution of offenders, and (iii) the assessment or collection of a tax or duty.

13. The method of claim 1 wherein the inquiry relates to Hedge Fund portfolio pumping.

14. The method of claim 1 wherein the gathered data relevant to the Hedge Fund accurately reports on or consists of a governmental record.

15. The method of claim 1 additionally comprising the step of insuring that the source of gathered data is reputable.

16. The method of claim 1 wherein the inquiry comprises to a lockup provision.

17. The method of claim 1 wherein the inquiry relating to the Hedge Fund comprises an alert list.

18. The method of claim 1 further comprising continually monitoring the aggregated data and transmitting any new information related the Hedge Fund.

19. The method of claim 1, further comprising enhancing the gathered data.

20. The method of claim 19 further comprising enhancing the data relevant to the Hedge Fund.

21. The method of claim 20 wherein enhancing the data comprises scrubbing the data to incorporate changes in the spelling of datum.

22. The method of claim 20 wherein enhancing the data comprises utilization of an index file.

23. The method of claim 1, further comprising augmenting the associated portions of aggregated data.

24. The method of claim 23 wherein augmenting the data comprises data mining.

25. The method of claim 1, wherein associating portions of aggregated data comprises Boolean logic.

26. The method of claim 1, wherein associating portions of aggregated data comprises relevance ranking.

27. The method of claim 1, further comprising receiving a source of gathered data and transmitting the source of the associated portions of aggregated data.

28. A computerized system for managing risk, the system comprising:

a computer server accessible with a system access device via a communications network; and

executable software stored on the server and executable on demand, the software operative with the server to cause the system to;

gather data relevant to a Hedge Fund from multiple sources;

aggregate the data gathered according to regulatory and reputational risk variables;

generate a certification for of the aggregated data to including a list of risk parameters associated with the Hedge Fund, the list of risk parameters being derived from the aggregated data and representative of a granularity level of aggregated data analysis;

receive a risk assessment inquiry relating to the Hedge Fund;

generate a risk quotient for the Hedge Fund by conducting data research on the certification including the list of risk parameters;

search, in response to the received risk assessment inquiry, the aggregated data for data portions related to the Hedge Fund and associate the data portions of the aggregated data with the Hedge Fund; and

generate a report including an indication of the certification the risk quotient, and the portions of the aggregated data associated with the Hedge Fund.

29. The computerized system of claim 28 wherein the data is gathered via an electronic feed.

30. A computer-readable medium storing a plurality of computer executable program code, the program code comprising instructions for causing the computer to:

gather data related to a risk subject from publicly available sources;

aggregate the data gathered according to regulatory and reputational risk variables;

generate a certification of the aggregated data to including a list of risk parameters associated with the risk subject, the list of risk parameters being derived from the aggregated data and representative of a granularity level of aggregated data analysis;

receive a risk assessment inquiry relating to the risk subject;

generate a risk quotient for the risk subject by conducting data research on the certification including the list of risk parameters;

search, in response to the received risk assessment inquiry, the aggregated data for data portions related to the risk subject and associate portions of the aggregated data with the risk subject; and

generate a report including an indication of the certification the risk quotient, and the associated portions of the aggregated data.