SIFMA AMG Releases Survey on Separate Accounts’ Impact on Systemic Risk

SIFMA Asset Management Group (“SIFMA AMG”) released the results of a survey to determine separate accounts’ vulnerability to systemic risk. 

SIFMA AMG surveyed nine asset managers on a number of issues, including investment strategy, use of leverage, investment in illiquid assets, use of securities lending, the regulatory status of the underlying clients, and risk management processes.  The survey found that separate accounts do not typically pose risk to financial stability.  Specifically, the survey found that in separate accounts with greater than $75 million in assets under management (AUM):

  • 99% invested in long-only strategies, with 53% invested in passively managed, diversified index strategies;
  • less than 4% of the large separately managed accounts (SMAs) surveyed employed leverage and the average leverage reported for these accounts is modest;
  • less than 2% of the large SMAs surveyed held illiquid securities and less than 2% engage in securities lending; and
  • 100% of respondents robustly monitor counterparty risk and employ comprehensive risk management procedures.

SIFMA AMG stated that it conducted this survey to “provide data on the assets and investment strategies of separate accounts managed by asset managers, and to clarify important misconceptions.”

See:  SIFMA Survey Results; Press Release.