Varenne Capital Partners, a leading global alternative investment manager, has chosen to leverage a partnership between its depositary, INDOS Financial, and fintech risk firm Clarus Risk, to provide a highly efficient fintech Liquidity Stress-Testing solution.
Following new ESMA liquidity stress test guidelines which came into force on September 30th 2020, this collaboration enables independent stress-testing and enhanced liquidity risk oversight while utilising connectivity now established between INDOS Financial and Clarus Risk to streamline the risk governance process.
Under the new operating model, Clarus Risk will source fund asset and liability data from INDOS Financial to generate liquidity risk metrics via its RiskMonitor® Liquidity solution which incorporates analysis of investor behaviour as well as asset risk scenarios to provide a comprehensive asset and liability appraisal in a broad and investor friendly format.
David Mellul, Managing Director of Varenne commented, “Strong risk management and corporate governance are key pillars of our responsible investment policy and our chosen independent depositary and risk service providers are now able to reinforce our risk oversight and transparency through their collaboration and the provision of regular liquidity stress testing”.
Bill Prew, CEO of INDOS Financial added “The new ESMA liquidity stress testing guidelines came into effect at a challenging time for the funds industry due to the on-going impact of COVID-19 on operations and financial markets. Through this partnership with Clarus Risk, INDOS is now able to facilitate independent liquidity stress testing for its clients in an efficient way, reducing their operational burden and enabling them to demonstrate compliance with the new requirements”.
Max Hilton, Managing Director of Clarus Risk added “The ESMA guidelines are principal based which brings subjectivity and complexity to the implementation of an appropriate solution. This fits well with our RiskMonitor® platform which is designed to facilitate client and fund specific risk reporting that aligns with the risk tolerance and underlying asset mix of each fund. This partnership with INDOS brings new operational efficiencies to the benefit of our clients”.
About Varenne Capital Partners:
Varenne Capital Partners is a process-driven, global investment manager whose purpose is to deliver superior long-term returns with the minimum necessary risk-taking. Varenne Capital Partners strives to achieve this goal by combining complementary investment frameworks – Long Equity, Short Equity, Merger Arbitrage and Tail Risk Hedging – in a single strategy. Varenne Capital Partners is based in Paris, France, where it was founded by its current management team in 2003. It operated as an advisor to VEGA Finance – private banking unit of the CDC/CE Group – – between 2003 and 2006 before establishing itself as an independent investment manager thereafter.
About INDOS Financial:
Founded in 2012, INDOS Financial has grown organically, developing solutions recognised as industry-leading within the fund oversight and depositary service space. As of December 2020, client assets under oversight had grown past $35 billion. INDOS also provides a range of independent AML and Environmental, Social, Governance (ESG) services for funds. INDOS recently announced that it has been acquired (subject to FCA regulatory approval) by JTC plc, the global provider of fund, corporate and private client services.
About Clarus Risk:
Clarus Risk was formed in 2011 to provide independent, first-class Managed Software as a Service (MSaaS) fintech solutions for the investment fiduciary marketplace. Clarus Risk’s award-winning risk analytics and reporting technology generates fully customisable risk and regulatory risk reporting solutions.