Business support and risk management
Efficient administration of the Fund’s business transactions and effective risk monitoring and management are vital for successful asset management.
The business support and risk management functions are organized in a separate department in order to maintain an independent status relative to the investment units. They handle the vast number of business transactions carried out every year by the internal investment units and external managers and monitor the Fund’s risks.
There is a strong emphasis on the use of efficient processes to ensure correct daily reporting and ongoing analysis of the Fund’s positions. In order to perform in-house analyses, it is necessary to have access to all transactions.
Business support and risk management activities span across many different areas.
Back office and accounting
The unit ensures that all transactions are correctly reported and that all trades are property cleared, i.e. that the Fund receives payment for sold securities and delivery of purchased securities. In addition, the unit is responsible for daily management of static data from a very large number of securities/derivative contracts and handles the Fund’s financial accounting and reporting.
Middle office
The unit is responsible for providing the Fund’s executive management, board of directors and investment units with fast and reliable reporting and evaluation of portfolio values, results and returns. This reporting is carried out on a daily, weekly and monthly basis and is focused on key performance indicators.
The unit is responsible for the Fund’s day-to-day risk management and reports continuously to the Fund’s executive management and board. Both financial and operating risks are monitored and reported. Because the unit’s work is focused on prevention of undesirable financial and operating risks, investments may be made only within the established limits and with approved counterparties. Furthermore, a share of the fund’s securities trading is processed electronically.
IT
Effective IT support is of critical importance for all areas of asset management. The IT unit is responsible for operation, maintenance and development of the Fund’s IT systems. As far as possible, the Fund’s system architecture is built on standard solutions. The IT unit also has project management responsibility at the Fund.
Legal services
Because the contract structure for the Fund’s management is complex, the Fund has an in-house legal advisor who also utilizes external legal expertise in specific areas of interest. Legal Services assists other units in the Fund with legal matters such as issues related to public procurements and agreements with external managers, counter-parties and other suppliers.