Liquidity Risk Management in Investment Portfolios Training Course

Introduction

This intensive 5-day training course provides a comprehensive and practical deep dive into liquidity risk management specifically tailored for investment portfolios. In today's volatile financial landscape, understanding and effectively managing liquidity risk is paramount for preserving capital, ensuring operational continuity, and meeting investor obligations. This program will equip participants with cutting-edge methodologies to identify, measure, monitor, and control liquidity risks across diverse asset classes, from traditional securities to alternative investments. Attendees will gain a robust understanding of both funding liquidity risk and market liquidity risk, enabling them to build resilient portfolios and navigate periods of market stress with confidence.

The course goes beyond theoretical concepts, focusing on real-world applications, practical tools, and the latest regulatory developments impacting liquidity management in investment contexts. Through interactive case studies, hands-on exercises, and discussions of current market events, participants will learn to design robust liquidity frameworks, implement stress testing and scenario analysis, and develop effective contingency funding plans. Whether you are a portfolio manager, risk analyst, treasury professional, or an investment operations specialist, this program offers an unparalleled opportunity to master the essential skills for safeguarding investment portfolios against liquidity shocks and optimizing their overall risk-return profile.

Duration: 5 days

Target Audience:

  • Portfolio Managers
  • Risk Managers
  • Investment Analysts
  • Treasury Professionals in Investment Firms
  • Fund Administrators
  • Operations Managers in Asset Management
  • Compliance Officers
  • Investment Consultants

Objectives:

  • To provide a comprehensive understanding of liquidity risk concepts in investment portfolios.
  • To equip participants with the skills to identify, measure, and monitor various types of liquidity risk.
  • To understand the impact of market structure and trading dynamics on asset liquidity.
  • To develop proficiency in designing and implementing robust liquidity risk management frameworks.
  • To explore regulatory expectations and best practices in liquidity risk reporting and governance.

Course Modules:

Introduction

  • Defining liquidity risk: funding liquidity vs. market liquidity.
  • Importance of liquidity risk management for investment portfolios.
  • Recent liquidity crises and their lessons for asset managers.
  • Regulatory focus on liquidity risk in investment funds and firms.
  • Overview of the course structure and key learning objectives.

Understanding Market Liquidity

  • Determinants of market liquidity: bid-ask spreads, trading volume, market depth, resiliency.
  • Liquidity profiles of different asset classes: equities, fixed income, derivatives, alternatives.
  • Impact of market structure, technology, and high-frequency trading on liquidity.
  • Measuring market liquidity: traditional metrics and advanced indicators.
  • Challenges in assessing liquidity for illiquid and complex assets.

Understanding Funding Liquidity

  • Sources and uses of funds in an investment portfolio context.
  • Understanding investor redemption patterns and behavioral liquidity.
  • Impact of collateral requirements and margin calls on funding liquidity.
  • Counterparty credit risk and its implications for funding.
  • Managing funding concentrations and diversification strategies.

Measuring and Monitoring Liquidity Risk

  • Quantitative metrics for liquidity risk: liquidity ratios, cash flow projections, redemption analysis.
  • Liquidity stress testing: designing scenarios, calibrating shocks, and interpreting results.
  • Contingent liquidity needs and scenario-based forecasting.
  • Liquidity risk limits and early warning indicators.
  • Developing robust liquidity dashboards and reporting.

Liquidity Risk in Different Investment Vehicles

  • Liquidity management in mutual funds and ETFs.
  • Liquidity considerations for hedge funds and private equity funds.
  • Managing liquidity for institutional portfolios (pension funds, endowments).
  • Special considerations for UCITS and alternative investment funds.
  • The role of prime brokers and custodians in fund liquidity.

Managing Liquidity Risk

  • Diversification strategies to enhance portfolio liquidity.
  • Dynamic asset allocation and rebalancing for liquidity management.
  • Use of derivatives for liquidity management and hedging.
  • Developing robust contingency funding plans (CFP).
  • Effective communication of liquidity risk to stakeholders.

Regulatory Landscape and Compliance

  • Basel III and its implications for bank liquidity (LCR, NSFR) and spillover to asset management.
  • IOSCO principles for liquidity risk management in collective investment schemes.
  • ESMA guidelines and other regional regulations.
  • Stress testing requirements from regulators.
  • Best practices in regulatory reporting and disclosures for liquidity risk.

Governance, Controls, and Best Practices

  • Establishing a robust liquidity risk governance framework.
  • Roles and responsibilities of the board, senior management, and liquidity risk committees.
  • Internal controls for liquidity risk management.
  • Independent validation of liquidity models and stress tests.
  • Integrating liquidity risk into overall enterprise risk management (ERM).

CERTIFICATION

  • Upon successful completion of this training, participants will be issued with Macskills Training and Development Institute Certificate

TRAINING VENUE

  • Training will be held at Macskills Training Centre. We also tailor make the training upon request at different locations across the world.

AIRPORT PICK UP AND ACCOMMODATION

  • Airport pick up and accommodation is arranged upon request

TERMS OF PAYMENT

Payment should be made to Macskills Development Institute bank account before the start of the training and receipts sent to info@macskillsdevelopment.com

 

Liquidity Risk Management In Investment Portfolios Training Course in Bolivia (Plurinational State of)
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