Of late risk management has become the focal point of discussion amongst the portfolio managers. The investment management industry needs to recognize that its global ambitions, significantly exceed its capabilities. To fulfil them, they need to revisit the issue of risk management.

In Hollywood parlance "It Girl" is someone who commands the spotlight at any given moment, though investment management industry is a far less glitzy place, yet there is such a thing as `RM' that is catching up. Risk management, `RM' has become imperative for the investment management companies. This shift was but natural considering the massive financial losses incurred by them in the backdrop of a crash in the stock markets world over.

What is novel about the renewed attempt to focus on risk management as far as the investment management industry is concerned is the attention being paid to risk levels that have appreciated considerably in the wake of global liberalization. The global stock markets have taken a beating everywhere irrespective of the economic conditions their nations are facing. Some increased correlation is inevitable in the face of greater cross border movements of capital and technology. Fund managers are showing greater interest in the risks they bear across all investments and products. It can be said that an existence of `truly global marketplace' is now clearly visible. Thus the aggregate set of risks borne by the investment management community is now not only larger but also more complex than it was a decade ago. Fortunately, technology has evolved at the same time making it possible for the fund managers to aggregate and analyze the multitude of risks. Risk management is a data driven process, which requires the ability to slice and dice the aggregate holdings on the right track and updating the risk and valuation models with time.

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