The US-based banking group Northern Trust has launched a new daily risk monitoring service and announced that UK fund management houseThames River Capital is its first user of the new service.

Northern Trust’s new daily risk monitoring service is based on complex analytics technology that enables clients to see where the risk lies in their portfolios and how changing events could raise or cut risks of losing money.  Risk data can be delivered online to fund managers.

“Our new daily risk monitoring capability is an important addition to our range of investment risk and analytical services aimed at asset managers,” said Ian Castledine, senior investment risk and product development consultant in Northern Trust’s Investment Risk & Analytical Services group.

“We are seeing an increase in demand for daily risk monitoring in the light of UCITS III [fund] regulation especially where over-the-counter derivatives are used. Our new service means that clients can trade these instruments and see, daily, how they impact the risk in a portfolio,” said Mr Castledine.

European Union UCITS III rules enable retail funds to use derivatives and other previously off-limits financial instruments that were once the sole preserve of investment vehicles such as hedge funds.

UCITS III funds are designed to be bought and sold across EU borders. 

Thames River Capital has just finished implementing the new daily risk monitoring service from Northern Trust as well as its performance measurement and attribution system for assets such as offshore long-only UCITS III equity, credit and property funds as well as long-short hedge funds.