A common operating model for Funds is to delegate one of the core fund management functions, portfolio management or risk management, to the AIF Manager.
The risk management function is often outsourced to the AIF 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 immense 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 AIF Manager also allows Funds to access the AIFM’s sophisticated infrastructure, systems, processes, and network that have been developed over many years through years of utilized experience and investment.
Risk Management services are available for the following:
- Implement effective risk management policies and procedures to identify, measure, manage and monitor on an ongoing basis all relevant risks.
- Monitoring risk limits of investment portfolios as per risk management policies, procedures and the law.
- Ensure 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.
- Performance of a 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.