2011 Buy-Side Survey Results

Key findings

  • 30% of buy-side respondents reported that accurate risk assessment was their biggest challenge. Most respondents planned to make some adjustment to their management strategy. The most popular adjustments included greater analysis and awareness of model risk (52%) and carrying out stress testing and scenario analysis (50%). The most important type of risk analysis used by the buy-side respondents was Monte Carlo VaR (40%).
  • Another challenging area listed was independent pricing and valuation (28%). To help meet this challenge, respondents used multiple sources for their valuations including in-house systems (46%), counterparty pricing (45%) and using spreadsheets (43%). When looking for an OTC valuation solution, transparent, documented models and easy to use/implement topped the list.
  • With all of the regulation changes taking place, it was no surprise that 57% of the buyside respondents felt that there would be a moderate or major impact on their business. Only 13% felt well prepared.
  • With all of the changes taking place in the market, it was not surprising that most buy-side respondents (54%) expected to spend more on IT in 2011. Systems and tools need to be updated in order to meet the needs of an ever-changing marketplace.