Market Risk Management
Central to BlackRock's investment management process is market risk management. The Risk & Quantitative Analysis Group (RQA) takes a globally integrated approach to the analysis and management of risk while also maintaining a strong regional orientation, with a physical presence in our largest investment centers. While risk can never be totally eliminated, this structure allows the team to apply global best practices while working hands-on with individual portfolio managers. RQA is responsible for:

• helping to ensure that the risks in BlackRock-managed portfolios are consistent with client objectives and that those risks are fully understood and properly managed by our portfolio managers;
• creating a common "risk" language and a set of standardized metrics used to communicate risk throughout the firm; and
• partnering with BlackRock Solutions to create practical, state-of-the-practice risk analytics

BlackRock has long been recognized for its disciplined investment process and rigorous bottom-up approach to risk management. Since its inception, BlackRock has focused on the need to assess security-and portfolio-level risks, to make investment decisions in rapidly changing markets, and to execute transactions efficiently, while ensuring strict adherence to risk management and compliance guidelines. As a result, BlackRock developed an integrated suite of investment management tools.

In 2000, BlackRock began offering these risk management and trade processing tools to external clients under the BlackRock Solutions brand. Since that time, BlackRock's strategy has been to deliver its significant investment in technology infrastructure and analytics to a select group of large institutional investors at a high level of sophistication, quality and service. Our investment tools are designed to provide portfolio transparency and increased efficiency. Aladdin®, our enterprise investment system, supports the entire investment management process, including risk analytics, portfolio management, compliance and operational processing. Aladdin’s comprehensive suite of risk reports (Green Package®) and interactive fixed income and derivative calculator (AnSer®) are also available on a stand-alone basis.

As of 30 September 2010, BlackRock Solutions provides services for approximately US$9.5 trillion in securities and derivatives across more than 140 clients, many of whom are among the largest and most sophisticated financial institutions in the world.

The Susquehanna International Group of Companies (SIG) is a privately held global investment, trading and technology firm servicing securities markets worldwide. SIG comprises a number of affiliated entities specializing in trading and proprietary investments in equities, fixed income, energy, commodity, index and derivative products, private equity and venture capital, research, customer trading, as well as more recent efforts in investment banking and institutional sales. Susquehanna is probably best known for expertise in derivatives pricing and trading, especially equity options.

SIG is a specialist or DPM (designated primary market maker) in approximately 600 equity options and 45 index options on the CBOE, AMEX, PHLX, and ISE, including big name equities such as Google, Goldman Sachs, JP Morgan, GE, Pepsi, and Microsoft and indices such as Nasdaq and Russell 2000 options.^[1]

SIG's headquarters office is in Bala Cynwyd, a western suburb of Philadelphia, Pennsylvania, USA. The firm employs more than 1,500 people in offices across North America (New York, Chicago, San Francisco, Philadelphia, Boston), Australia (Sydney), Europe (Dublin), China (Shanghai, Beijing) and Hong Kong (Hong Kong). SIG is one of the largest employers in Lower Merion township.^[2]

The Company

SIG was founded in 1987 by Jeff Yass, Arthur Dantchik, Steve Bloom, Eric Brooks, Andrew Frost and Joel Greenberg. The six original partners remain principal owners of the business. Yass and Dantchik are actively involved in the firm's trading strategies on a daily basis. Frost supervises private equity investments.^[3]

 Poker

Poker pervades the culture of SIG. The founders and senior traders believe that poker teaches lessons on risk taking that are applicable to trading in financial markets. SIG hosts an internal poker tournament annually and has even used poker as a recruiting tool. The company employs Bill Chen, a World Series of Poker star, in its quantitative trading group. ^[4]

Renaissance's charges a management fee of 5% and a profit participation of 36%, both of which are higher than the industry standard of 2% and 20%, respectively.^[6]