The Global Risks Alliance (GRA)
Public and private asset management, long-term risk, stewardship and systemic investment exposures. Asset Management Nexus is an established platform published by The Global Risks Alliance.
Global equity fund · As of week 17
| Company 1 | Transition plan | Vote against chair | Escalated |
| Company 2 | Water risk | Letter | Open |
| Company 3 | Board independence | Meeting | Progress |
Asset Management Nexus · Portfolio risk and stewardshipPortfolio risk and stewardship, in outline: domain structure with placeholder names and illustrative values, not a record.
Asset management risk is the set of risks investment managers and asset owners carry and pass on: concentration across portfolios, liquidity mismatch in open-ended funds, long-horizon climate and nature exposure and the quality of the data behind decisions. Asset Management Nexus, The Global Risks Alliance's platform for the sector, explains these risks and the duties around them; nothing on it is investment advice.
Portfolio researchers; investment managers; asset owners; stewardship teams.
Portfolio concentration; disclosure methods; long-horizon scenarios.
Portfolio risk briefs; stewardship evidence; professional research.
Where a portfolio's assets sit, and how much of its value is most exposed. Hypothetical assets, not an assessment.
Common exposures and diversification.
TopicClimate, demographic and technology shifts.
TopicOwnership influence and accountability.
TopicComparability and source limits.
TopicLiquidity mismatches and financial stability.
TopicPhysical and operational exposure.
TopicBusiness models and technology transitions.
TopicResponsible research versus advice.
TopicTransitions, stewardship and limits of climate-finance claims.
Asset Management Nexus studies how the investment industry holds, prices and stewards the economy's risks: concentration across portfolios, liquidity in open-ended funds, long-horizon climate and nature exposure, the quality of disclosure and the use of ownership rights. It sets out The Global Risks Alliance's shared view of the field for portfolio researchers, investment managers, asset owners and stewardship teams. Its pages describe mechanisms, data, methods and decisions, label every source, and give no investment advice.
Common exposures, index concentration, factor crowding and the overlap that can turn many diversified portfolios into one position.
Liquidity mismatch in open-ended funds, leverage, margin calls and the tools that allocate the cost of redemptions.
Climate, demographic and technology shifts that reprice sectors over the life of pension and insurance liabilities.
Voting, engagement, escalation and the accountability of managers to asset owners and beneficiaries.
Sustainability reporting standards, vendor data, rating divergence and the lineage from issuer report to fund disclosure.
Physical hazard, operational dependency and valuation practice in buildings, infrastructure and land.
Transition risk, transition plans and transition finance, with the limits on what climate-finance figures can claim.
Portfolio dependencies and impacts on nature, read through sector mapping and the TNFD LEAP approach.
Asset managers and asset owners, such as pension funds, insurers, endowments and sovereign funds, hold a large share of the world's savings on behalf of beneficiaries whose horizons run for decades. Modern portfolio theory teaches that diversification reduces risk, and for many risks it does. But some risks are systemic: they affect most assets at once and cannot be diversified away. Financial economists call this market or systematic risk.
Several forces make systemic exposure more pressing. Index investing and common benchmarks lead many portfolios to hold similar assets. Physical climate risks threaten real assets and the companies that depend on them across regions. Transitions in energy, technology and demographics change which business models remain viable. And liquidity can disappear across markets at the same moment, when many investors try to sell together.
When such exposures materialise, effects cascade. Falling asset values affect pension funding and household wealth; forced selling by some investors depresses prices for others; and stress in funds can spill into banks and markets. Asset management is therefore part of the financial system's stability, not only a set of individual investment choices.
Asset Management Nexus is designed to bring the industry together on shared, precompetitive questions: how common exposures are measured, how long-horizon risks are understood and how stewardship evidence is assessed.
Methods for seeing concentration across portfolios and benchmarks. See portfolio concentration.
Scenario methods for climate, demographic and technology shifts. See long-horizon risk.
How data and disclosures can be compared, and where they fall short. See data and disclosure.
Signature outputs are designed to include portfolio risk briefs, stewardship evidence and professional research. They describe methods and evidence, never recommendations about securities, strategies or managers.
The platform draws on four STEM methods held in the GCRI STEM Commons: financial economics and macro-finance, financial and risk engineering, scenario design and stress testing and econometrics. Its STEM applications show how each is used.
Science on the physical and ecological risks that reach portfolios comes from The Global Centre for Risk and Innovation (GCRI), notably Climate and Hazards and the Biodiversity Nexus. Governance dialogue on climate and nature is convened by Climate and Nature Governance at The Global Risks Forum (GRF). Within GRA, it works alongside Financial Stability, Climate and Nature Financial Risk and the Institutional Funds Nexus. See all counterparts.
Platform research is designed to feed the Nexus Reports Finance and Insurance Readiness series and Scenario and Stress-Test series, and a Nexus Universe exercise on portfolio stress under a transition scenario, described on the platform's Universe page.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Liquidity mismatch | The gap between how quickly a fund promises to repay investors and how quickly it can sell its assets without loss. |
| Stewardship | Investors' use of ownership rights and influence, through voting, engagement and escalation, to protect long-term value. |
| Universal owner | A large investor so widely diversified that it effectively owns a slice of the whole economy and its systemic risks. |
| Fiduciary duty | The legal duties of loyalty, prudence and care that trustees and managers owe to beneficiaries. |
Every claim on Asset Management Nexus rests on methods with a canonical page in the STEM Commons, so readers can see what a finding depends on and where its limits lie.
A question becomes evidence, a governed build, an organized community, a controlled test, a reviewed publication and, finally, a decision taken by the competent authority under its own rules.
Fig.The Nexus cycle on this platform, from question to renewal. Design, not a record of a run.
The platform does not set standards. It reads its evidence against the frameworks that competent bodies have adopted, so a finding can be placed where a decision-maker already works.
| Framework or standard | Body | What it sets |
|---|---|---|
| IFRS S1 and IFRS S2 | International Sustainability Standards Board, IFRS Foundation | General sustainability-related and climate-related financial disclosure, including scenario analysis and financed emissions for asset managers |
| TNFD recommendations and the LEAP approach | Taskforce on Nature-related Financial Disclosures | Disclosure of nature-related dependencies, impacts, risks and opportunities, with additional guidance for financial institutions |
| TCFD recommendations | Task Force on Climate-related Financial Disclosures, Financial Stability Board | The governance, strategy, risk management and metrics structure of climate disclosure, now carried into IFRS S2 |
| UCITS Directive and AIFMD | European Union, with ESMA guidelines | Authorisation, diversification, liquidity management tools, leverage limits and supervisory reporting for EU funds and their managers |
| Sustainable Finance Disclosure Regulation | European Union | Entity and product disclosure of sustainability risks, principal adverse impacts and sustainable investment claims |
| IOSCO Objectives and Principles and the recommendations on liquidity risk management | International Organization of Securities Commissions | Principles for regulating collective investment schemes and managing liquidity in open-ended funds |
| UK Stewardship Code and other stewardship codes | Financial Reporting Council; Japan Financial Services Agency; ICGN Global Stewardship Principles | Expectations for how investors exercise ownership rights and report what they did and with what outcome |
| Principles for Responsible Investment and the PRI reporting framework | PRI | Six principles for signatories and the annual framework through which they report responsible investment and stewardship practice |
| GFANZ transition plan guidance | Glasgow Financial Alliance for Net Zero | Components of net-zero transition plans for financial institutions and expectations of real-economy transition plans |
| CFA Institute Code of Ethics and Standards of Professional Conduct, and GIPS | CFA Institute | Professional conduct, research objectivity, suitability and fair dealing, and standards for presenting investment performance |
GCRI studies a field as science, GRF governs it and GRA builds shared financial understanding of it. Asset Management Nexus links to its counterparts so that work on one side is visible on the others.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.