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 management, and our global corporate insurance program.

The Total Fund Investment Risk and Restructuring team provides a holistic view of the total fund risk by incorporating both private and public market investments for a dynamic and granular approach to exposure, emerging risks, as well as the impact of new opportunities. The team performs fundamental analysis and assigns internal risk ratings and covenants to external managers.

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

The Private Market Risk team performs fundamental analysis and assigns internal risk ratings and covenants to private market transactions, performs an annual review of existing ratings and ensures that the risk rating for each asset class (aggregate of all individual risk ratings) is in line with their portfolio target risk rating.

Our Credit and Liquidity Risk team performs fundamental credit analysis on all counterparties, brokers and modelling of credit risk indicators. It develops, monitors and reports on liquidity/leverage metrics and ensures that investments held for liquidity purposes meet high standards in terms of liquidity and credit profiles.

Download our Risk Appetite Overview
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Risk Appetite Overview
Date: Sept. 28, 2018
Size: 176.2 KB