RISK MANAGEMENT 

PGIM Quantitative Solutions designs proprietary equity and multi-asset solutions that seek to solve beyond alpha by combining the latest technology with scalable, rigorous risk controls customized to help solve each client’s evolving challenges.

Our approach to risk management is built on a comprehensive framework employed to evaluate risk on multiple dimensions including investment risk factors, managing risk, and monitoring risk across each of our platforms and strategies:

• Investment Risk Factors: Utilizing both proprietary and third-party models we rigorously assess potential risks via both return- and holdings-based analytics to monitor and address portfolio-based risks in real time. 
• Managing Risk: We employ a proprietary optimizer to construct and regularly rebalance portfolios to maximize potential alpha while aligning with set risk limits and investment guidelines. Our highly diversified strategies avoid portfolio concentration and limit exposure to systematic risks. 
• Monitoring Risk: Our portfolio management teams conduct regular, proactive risk assessment utilizing both proprietary and third-party risk management tools. This ongoing monitoring allows for swift identification and management of emerging risks, ensuring that performance drivers remain in line with expectations. Our Compliance unit monitors portfolio exposures relative to investment and regulatory guidelines on a daily basis and reports to the portfolio management team when a limit may be breached.

Jennison Associates specializes in active equity and fixed income investing, applying a fundamental approach to research and security selection. Risk management is integral to how we conduct our business and we believe that as the investment and operating environment evolves, so will the drivers of risk. Our risk framework is designed to identify and mitigate various forms of risk, with controls including systems and process monitoring and periodic risk reviews at senior levels of our organization.

• Corporate governance: Jennison’s corporate governance processes are informed by our board of directors and Risk Committee, with input from internal advisory groups. Chaired by our CEO, the Risk Committee focuses on emerging risks and operational risk exposures.
• Investment risk: Jennison’s investment professionals are the primary managers of investment risk. They receive additional support and monitoring through independently generated internal reports and the respective heads of investment platforms. Key areas of investment risk are also reviewed in firm-level executive forums.
• Investment operations risk: Our dedicated investment services personnel are tasked with ensuring robust oversight and necessary escalation for different aspects of investment operations risk, including counterparty, valuation, liquidity, and emerging risks.

PGIM Private Capital’s global network penetrates target markets and offers steady deal flows to investors, while building direct relationships with prospective issuers. We have 185 dedicated investment professionals on 47 deal teams and operating in 15 offices globally. 

Our Patient, Long-Term investment Strategy is backed by a comprehensive Investment Process.

Credit Analysis / Pricing:

• In-depth credit analysis of all issuers completed by experienced local teams.
• Direct origination model allows for one-on-one dialogue with management teams.
• Relationship-based approach creates opportunities to get to know issuers and prospective issuers at a more granular level through years or even decades of discussions.

Portfolio Monitoring:

• Most investments contain financial covenants designed to help mitigate downside risk.
• Multiple dedicated teams of workout professionals to manage distressed investments.