Fund Management relying on recognised research

In order to achieve consistent performance, Groupama Asset Management's teams implement responsible investment practices that integrate recognised research capabilities in macroeconomic, financial and extra-financial analysis as well as financial engineering.
The research teams constitute one third of the teams dedicated to asset management and their assessments are widely circulated throughout the whole company.

Creative and independent fund management teams

The fund managers are supported by these research capabilities and compare the results against prevailing ideas in the markets. This ongoing comparison gives rise to the investment ideas that can be found in the portfolios. The fund managers benefit from a high level of autonomy in building their portfolios which guarantees responsibility for performance.

Rigorous risk control

In accordance with the General Rules of the French Financial Markets Authority (AMF) [www.amf-france.org], Groupama Asset Management has put in place a control mechanism that covers all company risks. At the end of 2008, this mechanism was reinforced, restructured and divided between two distinct areas of activity, each chaired by a Head of Internal Compliance and Control (Compliance officer) and operating within a specific scope:

• Internal Compliance and Control/Permanent Control (including risk control)
• Internal Compliance and Control/Compliance (including ethics)

Their roles are broken down as follows:

This mechanism enables all the different types of business risks to be covered (legal, non-compliance, fraud, investment, operational, etc.). A map of the risks enables the company’s risk areas to be represented and prioritised in a hierarchy.

The two Heads of Internal Compliance and Control (RCCI – Responsable Conformité Contrôle Interne) are also supported by controls put in place by the Head of Information Systems Security (RSSI – Responsable de la Securité des Systèmes d’Information). Highest ratings and certifications.

Third-level operational audit

An internal audit department, reporting directly to the CEO, is responsible for regular audits within the company. It ensures the implementation of audits carried out by the operational departments and by the departments responsible for continuous auditing. The internal audit department is also responsible for evaluating the internal audit and compliance processes. It carries out specific tasks at the request of the CEO and according to a programme approved by the Audit Committee.

Internal audit reporters

The internal audit department is supported by a network of internal audit reporters (CCI – Correspondants de Contrôle Interne), made up of 23 employees distributed among Groupama AM’s various departments. The CCIs are responsible for facilitating the smooth running and effective and continuous implementation of the internal audit culture within their departments. Being at the heart of the businesses, it is the CCIs who are in the best position to know the risks associated with their activities; they ensure the implementation of procedures, 1^st-level audits and recommendations issued as a result of other audits or incidents.

Tools for a risk control system

In a climate of financial crisis, threatened bankruptcy of counterparties, market risks or circulation of toxic products, Groupama AM has been seeking to reinforce its audit procedures in order to exercise even better control over the risks to the portfolios managed on behalf of its customers. The Risk Control team analyses the positions and valuations, ensuring that managers have taken no unforeseen or badly evaluated risks. This is how compliance with investment limits (control of the management framework), risk-return indicators, counterparty risk and methods for valuation of new instruments is audited and controlled. A system for detection and analysis of new acquisitions of potentially “complex” securities was implemented during 2009. This involves an additional filter that enables a clearer understanding of the risk exposure brought about by new, atypical products that could be impossible to adapt to the risk profiles of the portfolio buyers. More recently, a tool was put into place that aims to estimate the liquidity risk of funds open to the public. All of these tools are filters that ultimately combine to form a whole system that reduces and controls risk.

Highest ratings and certifications

The quality of its operational platform, the stability of its teams, its financial solidity and its capacity to respond to presentation requirements for GIPS performances....all of these assets have led Groupama Asset Management to achieve the highest ratings and certifications (Fitch Ratings Note 2010, GIPS certification, SAS 70 certification, CIES certification).