Risk Management TEMPLATE SERVICE

Service overview

Independent risk oversight across the fund lifecycle

FundSight provides an independent risk management and investment compliance function for UCITS, regulated AIFs and RAIFs in Luxembourg and other European jurisdictions.

Our role is to ensure that portfolio activity remains aligned with applicable regulatory requirements, investment restrictions, fund documentation, internal risk limits and, where relevant, sustainability-related objectives.

Risk oversight is delivered through a structured framework covering risk identification, risk profiling, limit definition, independent monitoring, stress testing, liquidity analysis, escalation and formal reporting to Conducting Officers, Risk Committees and Boards.

Risk methodologies are tailored to each fund strategy and calibrated in line with UCITS, AIFMD and local regulatory requirements, taking into account the fund’s asset classes, liquidity profile, leverage, concentration and counterparty exposures.

Our scope

A comprehensive risk and investment compliance framework

Our framework combines independent monitoring, documented challenge and governance reporting across the principal risk dimensions of UCITS, AIF and RAIF structures.

Market and Counterparty Risk

Monitoring of market exposures, concentration, volatility, derivatives, counterparty risk and other relevant risk drivers in line with the fund’s strategy and regulatory framework.

Liquidity and Leverage Risk

Assessment of liquidity profiles, redemption scenarios, leverage levels and stress conditions to support resilience and compliance with UCITS and AIFMD expectations.

Investment Compliance

Independent monitoring of investment restrictions, limits, regulatory requirements and contractual constraints applicable to the fund.

Delegate Risk Oversight

Structured due diligence, ongoing challenge and monitoring of delegated portfolio managers within a documented and risk-based supervision framework.

Core responsibilities

Key activities and deliverables

Risk Identification and Profiling

Identification of material risks arising from the investment strategy, asset classes, leverage and liquidity profile.
Definition and maintenance of the fund’s risk profile.
Calibration of risk methodologies and monitoring parameters.
Review of risk disclosures in fund documentation.
Alignment of the risk framework with UCITS, AIFMD and applicable local regulatory requirements.

Risk Limits and Investment Restrictions

Definition and implementation of risk limits and thresholds.
Independent monitoring of investment restrictions and portfolio constraints.
Review of concentration, issuer, counterparty and exposure limits.
Monitoring of leverage and derivatives-related exposures.
Escalation of breaches, exceptions and emerging risk concerns.

Liquidity Risk Management

Assessment of asset liquidity and portfolio liquidity profiles.
Monitoring of redemption terms and investor concentration.
Review of liquidity buckets and liquidation assumptions.
Performance of liquidity stress testing and scenario analysis.
Identification and escalation of potential liquidity mismatches.

Stress Testing and Scenario Analysis

Design and implementation of strategy-appropriate stress tests.
Analysis of adverse market, liquidity and concentration scenarios.
Review of sensitivity to key risk factors and market shocks.
Documentation of assumptions, results and management conclusions.
Reporting of material findings to relevant governance bodies.

Oversight of Delegated Portfolio Managers

Initial and ongoing risk-focused due diligence of delegates.
Review of delegate risk frameworks, resources and controls.
Monitoring of portfolio exposures, breaches and risk indicators.
Challenge of risk-related information and remediation actions.
Escalation of recurring, unresolved or material deficiencies.

Governance Reporting and Escalation

Preparation of periodic risk reporting for Conducting Officers, Risk Committees and Boards.
Presentation of concise, decision-ready risk information.
Documentation of breaches, exceptions and remediation measures.
Maintenance of a clear escalation framework.
Support for regulatory, audit and depositary review processes.

Built for investment managers who expect more than compliance

Risk management is not only a regulatory obligation. It is a core component of robust governance, investor confidence and scalable fund growth. FundSight combines independent oversight, regulatory expertise and practical risk controls designed to support, rather than unnecessarily restrict, investment activity.

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