Risk Management

AB's organisational structure fosters risk management at all levels of the firm, embedding risk management as a core value and part of our culture, not just as an oversight function.

Our Approach

Risk Controls

Our investment process employs a full range of risk controls, from the targeting and budgeting of total active risk to performance attribution. In implementing our process, we use proprietary risk models as well as an automated before trade and after trade compliance system. Risk management is also incorporated into our research, portfolio construction, counterparty selection and management of operational processes.

Risk Culture

The importance of risk management is given ongoing emphasis by the firm's leadership and senior management team, and each employee is encouraged to consider risk management as integral to his or her job function. This all works towards supporting a culture of risk management throughout the firm.

Risk Excellence

In June 2016, AB was recognized by Risk magazine for excellence in operational risk management, and named "2016 Asset Manager of the Year in Operational Risk." Risk magazine cited AB for our strong risk culture as well as for our risk management framework, team and operational risk environment.

Categorising Risk

We consider risk to have three components: investment risk, counterparty risk and operational risk.

Investment Risk

Primarily the responsibility of Portfolio Managers, but senior management and a separate and independent Investment Risk Management Group function provide oversight of all portfolios as a part of a broader set of checks and balances.

Risk management also provides perspective at the firm level, ensuring aggregate exposures and risks are addressed.

Counterparty Risk

Primarily the responsibility of the Global Risk Management Team, with support from multiple functional groups across the organisation. AB carefully selects and monitors all counterparties with whom we do business on behalf of client portfolios. Our Credit and Counterparty Risk Committee must review and approve all counterparties from a credit standpoint. Existing counterparty exposures are then monitored continuously by both our Investment Risk Management Group and our Credit Counterparty Risk Committee.

Operational Risk

Primarily the responsibility of line management, with supervisory responsibility residing with the head of each business unit.

The Centralised Oversight Group sets enterprise standards and ensures adherence to those standards.

Risk Committees

AB's Senior Management Risk Oversight Committee (SMROC) is responsible for creating our Risk Framework and overseeing its implementation across the firm. The SMROC creates policies and procedures and leads the governance committees overseeing risks in each business unit and each functional area. This Committee also ensures the organisation stays abreast of best practices and external developments in risk-related areas.

In addition to this independent Global Risk Management structure, we also have a series of Risk Oversight Committees comprised of senior executives from across the firm. Both within these risk governance committees and other less formal meetings, senior management from the various business units and members of the independent Risk Management Group regularly meet and interact to discuss relevant risk issues and mitigation plans.

This information is provided by AllianceBernstein Limited, 60 London Wall, London, EC2M 5SJ. Registered in England, No. 2551144. AllianceBernstein Limited is authorised and regulated in the UK by the Financial Conduct Authority (FCA - Reference Number 147956). It is provided for informational purposes only and does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed are based on our internal forecasts and should not be relied upon as an indication of future market performance. The value of investments in any of the Funds can go down as well as up and investors may not get back the full amount invested. Past performance does not guarantee future results. This information is directed at Professional Clients only and is not intended for public use.