About 200 RIAs own 50% of the equity of the leading FHCs
Portfolio Risk Reports cover more than 200 registered investment advisers (RIAs). Portfolio Risk Reports apply Ethics Ratings to adjust the value of debt, equity and related security-based swaps (SBSs) for FHCs in clients’ portfolios.
Portfolio Risk Reports include 10 questions that responsible investors will want to ask FHC Boards to help uncover FHCs’ true financial conditions.
Current research includes legal and financial governance risks that directly impact earnings, enterprise values and investment values for more than 200 RIAs with over $8 trillion of assets under management, of which $500 billion is allocated to covered FHCs. That $500 billion investment represents in aggregate roughly a 50% equity ownership interest in the covered FHCs.
Undisclosed compliance violations often contribute to overstatements of earnings, capital and enterprise values
Current counterparty credit risk research includes adjusted credit ratings and adjusted credit default swap prices. The adjusted credit ratings represent in aggregate over $2 trillion of debt owned by the covered FHCs. Portfolio Risk Reports address the new Dodd-Frank Act (DFA) reporting requirements for RIAs, Private Funds (PFs) and SBS dealers. These include:
- Effective August 10, 2011, the reporting of regulatory assets under management on Form ADV by RIAs and PFs using the market value for RIAs (See SEC Release No. IA-3110) and the fair value for PFs. (See SEC Release IA-3111)
- Effective October 11, 2011, the reporting of post-trade transactions by SBS dealers on security-based swaps that include credit-default swaps. (See SEC Release No. 34-63346)
More than 70% of the $1 trillion aggregate equity value of the covered FHCs is at risk of an earnings restatement in excess of -15%