Risk Management is often outsourced to the Fund Manager, which allows the Fund’s Board to demonstrate that the delegated function is hierarchically and functionally separate from the Fund’s portfolio management function, often achieving economies of scale and transfer of knowledge from the AIF Manager to the Board of the Fund.
Risk management is performed by the AIF Manager with a frequency and methodology appropriate to the risk profile of the Fund. Delegation to the Fund Manager also allows Funds to access a more sophisticated infrastructure, systems, and processes.
Risk management services include the following:
- Implementing effective risk management policies and procedures
- Monitoring risk limits of investment portfolios as per risk management policies, procedures and the law.
- Ensuring that the Fund’s risk profile is consistent with risk limits set.
- Suggesting risk mitigation measures especially with regards to liquidity and funding risks.
- Performing sensitivity analysis and stress tests.
- Management of leverage and exposures of the Fund.
- Drafting the Annual Risk Management Report.
Anti-Money Laundering Compliance
- Creating and reviewing AML procedures.
- Conducting AML reviews and identifying deficiencies.
- Performing due diligence on potential investors and counterparties.
- Preparation of the Fund Manager’s annual AML report and the AML Monthly Prevention Statement.
- Preparation and submission of reports to local authorities.
- Preparation of the necessary reports to the Fund’s Board of Directors.
- Handle queries relating to regulatory compliance issues.
- Reviewing the Internal Procedures Manuals, the Subscription/Redemption Forms, and the Fund’s Client Acceptance Policy.
- Conducting compliance reviews and identifying deficiencies.