Risk management

Risk management

Structured to see the big picture

A holistic view

Our enterprise risk management process takes an integrated approach to managing a full spectrum of risks—from private and public investment risks, to liquidity, leverage and non-investment risks. In addition, our structure is aligned to support a total portfolio management view.

“Risk management is part of our culture; all employees are active participants in identifying, monitoring, evaluating and reporting risks.”

A rigorous approach

Dedicated experts for each focus area

We have a Risk Management Group dedicated to establishing effective risk management practices and processes. To ensure our risk overview takes into account the full spectrum of risks, the group is subdivided into specialized teams for each core focus area.

Photo of PSP Investments’ experts gathered in the Montréal office

Role of the Board of Directors

Our Board plays an integral role in our risk management process by establishing the Risk Appetite Statement (RAS) and by defining the risk philosophy in alignment with our mandate and the risk objective set out by the Government of Canada.

Meet our Board members

Role of Senior Management

Senior management oversees the Risk Management Group to ensure risks are monitored, managed and reported. In collaboration with our independent Risk Management Group, it also ensures that risks are within the boundaries of the RAS.

Meet our senior management

We integrate environmental, social and governance (ESG) factors into our risk analysis. Discover how we invest responsibly.

More on our approach to risk management

Our Enterprise Risk and Crisis Management team is responsible for the development and refinement of sound corporate-wide enterprise and operational risk management processes. The team has implemented a risk-based approach to crisis management, employee travel and safety management and our global corporate insurance program.

The Capital Market Risk team monitors and reports on all aspects of investment risk and derivatives valuation for publicly traded securities, including quantitatively measuring risk at the total portfolio and active management program level, performing portfolio stress tests, sensitivity analyses, market value and risk-factor decomposition and monitoring risk metrics relevant to specific portfolios.

The Credit and Private Investment Risk team performs all fundamental analyses for the Risk Management Group, including initial assessments and annual reviews. For private investment transactions, they assign internal risk ratings and specific covenants to each transaction to ensure that the risk profile of each asset class is in line with its portfolio target risk rating. In addition, the team participates in the valuation process and monitors on an ongoing basis the news and various limits/guidelines for private investments, counterparties, brokers and issuers.

Our Transversal Risk team provides a total fund perspective, overseeing the risk framework across asset classes highlighting interdependencies and potential impacts on PSP’s total portfolio and its ongoing evolution. The team is also responsible for maintaining and improving the leverage and liquidity framework and investment metrics on the total fund. They deliver a holistic view of total fund risks by encompassing both private and public market investments for a dynamic approach to exposure and concentration analysis.