A Case Study

Gain full control over NPF assets

Complete, and enhance your risk management

Draw on years of experience from some of Russia’s largest Private Pension Funds

Given the nature of their activities, as well as the social responsibility due their customers, private pension funds must pay stringent attention to the organisation of the investment process. This is true both for processes associated with self-investing, as well as with investments through asset management companies (MC) who are managing the Fund’s assets.

What can a Fund do to solve the tasks associated with the control and management of their assets?

Basically, there are two approaches to the control process: passive and active.

TRUST: The passive approach is based on, and relies entirely on, ‘trust’. As an example — an NPF receives reports from their MC, looks at the reports, and says OK — we assume that the MC is always reporting correctly. This option requires little or no costs, and assumes that the Fund undertakes the role of an ‘observer’, whilst at the same time, the Fund is still solely responsible towards its investors. Do Funds appreciate this approach? Surely not!

VERIFY: The active approach is to verify. This option means that the NPF receives not only yearly reports, but also all the information about all the transactions made by the MC with NPF assets, from the MC. The NPF then conducts its own calculations, and compares their results with those obtained from the MC. However, in order to receive significant economic benefit from active control, the NPF needs to automate the control process at the highest possible level. One of the most effective ways to organise the control of the asset management is to implement GAMA.

InfoStroy has developed a brochure which describes the key areas where NPFs can gain significant improvements by implementing the GAMA portfolio management solution. Topics covered include how the Fund will be able to:

  • Monitor the results provided by the MC
  • Monitor the portfolio of the Fund as a whole
  • Organise, and enhance, the risk management in the Fund
  • Gain significant assistance for the preparation of financial statements in accordance with IFRS

To request our printed brochure — which covers the above topics more comprehensively — by mail, please send us an e-mail and remember to include your company name, postal address and the name of the recipient.