Risk management

Effective asset management is impossible without a systematic approach to risk. We identify, analyse, assess and control the key risks of the Company and of the funds we manage, and we review them regularly as market conditions change. Decisions on each risk are taken deliberately — weighing the possible consequences, the Company's resources and consistency with the investment strategy.

The risk management system forms part of the Company's overall internal control system. Responsibility for its operation lies with the Director, who oversees the assessment and treatment of risk across all levels of the Company's activities and of the funds under management.

We recognise that financial markets are volatile and complex, so the approach to risk must be practical rather than formal — one that allows us to respond to new challenges in good time while keeping a balance between caution and the opportunities for the funds to grow.

The principles we follow

Considered decision-making — we assess risk comprehensively, weighing the possible benefits against the consequences, in the knowledge that risk can never be avoided entirely.

Risk mitigation — for the portfolios of the funds under management we select assets whose risks lend themselves best to control, reduction or optimisation.

An individual approach — each fund, and the Company itself, has its own risk profile, so decisions on accepting or avoiding risk are taken separately for each of them.

Economic justification — the cost of managing a risk does not exceed the financial losses its materialisation could cause.

Balance of risk and return — the level of risk is always weighed against the expected return on an asset before a decision is taken.

Optimising the risk profile — decisions are based on a mandatory analysis of the balance between the acceptable level of risk and target return.

Consistency with strategy — all decisions are aligned with the investment strategy of the specific fund or with the Company's financial strategy as a whole.

Clarity of decisions — every risk decision is specific and unambiguous, leaving no room for double interpretation.

Control of excessive risk — where the potential consequences exceed the Company's financial capacity, strategies of risk avoidance or of full or partial transfer to third parties are applied.

Capital adequacy — the Company's capital corresponds to the level of risk in its own activities and in those of the funds under management.

Adequacy of incentives — the pursuit of high returns for the funds under management is always aligned with the risk profile defined by each fund's investment strategy.

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