How we manage your fund
### Fund Management Policy
#### 1. Introduction
The purpose of this Fund Management Policy is to establish a comprehensive framework for the effective management, governance, and operation of investment funds under management. This policy outlines the responsibilities of the fund manager, the processes for investment decision-making, risk management, compliance, and investor relations to ensure that funds are managed in a manner consistent with their objectives and in compliance with applicable laws and regulations.
This policy is designed to ensure transparency, accountability, and effective stewardship of the capital entrusted to the fund manager, while protecting the interests of investors and stakeholders.
#### 2. Objectives of the Fund
The primary objective of the fund is to maximize returns for investors while managing risk in a manner consistent with the fund’s stated investment strategy. This involves making sound investments in line with the fund's mandate and managing the portfolio actively to generate income, preserve capital, and achieve long-term growth.
Key objectives include:
- Achieving superior risk-adjusted returns.
- Preserving and growing investor capital.
- Complying with legal, regulatory, and tax obligations.
- Aligning investment activities with the agreed-upon strategy outlined in the fund’s offering documents.
#### 3. Roles and Responsibilities
##### 3.1. Fund Manager
The fund manager is responsible for the overall operation of the fund and is tasked with the day-to-day management, including:
- Making investment decisions in accordance with the fund’s strategy and risk appetite.
- Ensuring proper portfolio diversification and liquidity management.
- Monitoring the fund’s performance and adjusting investments as necessary to meet objectives.
- Ensuring compliance with all applicable laws, regulations, and fund documents.
- Maintaining effective communication with investors, including regular performance updates.
##### 3.2. Investment Committee
The Investment Committee, where applicable, provides oversight and guidance for the investment process. The committee’s responsibilities include:
- Reviewing and approving significant investments or divestments.
- Ensuring that investment decisions align with the fund’s strategy and risk parameters.
- Monitoring performance against benchmarks and objectives.
- Conducting periodic reviews of the portfolio and asset allocation.
##### 3.3. Compliance Officer
The Compliance Officer ensures that the fund complies with applicable regulatory and legal requirements. Key responsibilities include:
- Monitoring adherence to regulatory requirements.
- Ensuring that anti-money laundering (AML) and know-your-customer (KYC) processes are in place and followed.
- Overseeing the fund’s reporting obligations to regulators and investors.
##### 3.4. Risk Manager
The Risk Manager’s primary role is to identify, assess, and manage risks within the fund’s portfolio. Responsibilities include:
- Implementing a risk management framework to assess portfolio risk, market risk, credit risk, liquidity risk, and operational risk.
- Reporting on risk exposures and ensuring compliance with the risk tolerance levels set by the Investment Committee.
- Advising the fund manager and the Investment Committee on risk mitigation strategies.
#### 4. Investment Strategy
The fund’s investment strategy is a detailed outline of how the fund manager intends to allocate assets to achieve the fund's objectives. The strategy is aligned with investor expectations as outlined in the fund’s prospectus or other offering documents. This section outlines key components of the investment strategy:
##### 4.1. Asset Allocation
The fund manager must ensure that the fund's assets are allocated in accordance with its strategy. Asset allocation is a critical component of the portfolio’s risk-return profile, and the manager must continuously monitor and adjust allocations to maintain alignment with the strategy.
##### 4.2. Diversification
Diversification is key to managing risk in the fund’s portfolio. The manager must ensure that investments are diversified across different asset classes, industries, sectors, and geographies, depending on the fund’s objectives. Concentration risk should be minimized through appropriate asset allocation.
##### 4.3. Liquidity Management
Liquidity must be managed to ensure the fund can meet redemption requests and other obligations. The fund should maintain sufficient cash reserves or invest in liquid securities to ensure adequate liquidity while minimizing drag on performance.
##### 4.4. Risk Management
The fund manager is responsible for managing the risk exposure of the portfolio. This includes monitoring market volatility, currency risks, interest rate fluctuations, and counterparty risks. The risk management framework should be reviewed regularly and adjusted as needed to reflect changing market conditions or fund objectives.
##### 4.5. Leverage
Leverage, if used, should be managed prudently and within the limits set by the fund’s governing documents and regulatory constraints. The use of leverage must be monitored to ensure that it does not unduly increase the risk of the portfolio.
#### 5. Risk Management Framework
The fund must operate within a defined risk management framework that identifies, measures, monitors, and mitigates risks. The framework includes:
##### 5.1. Market Risk
The fund is exposed to market risk through changes in the value of its assets due to fluctuations in financial markets. Market risk should be measured using appropriate metrics such as Value at Risk (VaR), stress testing, or scenario analysis.
##### 5.2. Liquidity Risk
Liquidity risk is the risk that the fund will not be able to meet its obligations, such as investor redemptions, due to the illiquidity of its investments. The fund manager must ensure that the portfolio maintains sufficient liquidity to meet its short- and long-term obligations.
##### 5.3. Credit Risk
Credit risk arises when counterparties fail to meet their contractual obligations. The manager must assess the creditworthiness of all counterparties and invest in securities with manageable credit risks.
##### 5.4. Operational Risk
Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, people, and systems. The fund manager should implement strong internal controls, conduct regular audits, and ensure operational resilience.
##### 5.5. Compliance Risk
Compliance risk is the risk of legal or regulatory penalties as a result of non-compliance with applicable laws and regulations. The Compliance Officer must regularly review legal and regulatory obligations and ensure that the fund operates within these guidelines.
#### 6. Investment Process
The investment process ensures that all investments are made systematically and within the parameters of the fund’s strategy. The process includes:
##### 6.1. Due Diligence
Before making any investment, the fund manager must conduct thorough due diligence on the target asset or investment opportunity. This includes financial analysis, industry research, market assessment, and legal review.
##### 6.2. Approval Process
All investments must be reviewed by the Investment Committee and approved if they meet the fund’s criteria. Investments that fall outside the pre-agreed strategy or risk limits should not be made without appropriate authorization.
##### 6.3. Monitoring and Reporting
Once an investment is made, it must be monitored regularly to ensure that it continues to meet performance expectations and that risks remain within acceptable limits. Regular reporting to the Investment Committee and investors is required.
#### 7. Valuation and Reporting
Valuation is critical to providing an accurate reflection of the fund’s performance. All assets must be valued in accordance with industry standards and best practices.
##### 7.1. Valuation of Assets
The fund manager must ensure that the fund’s assets are valued fairly and accurately. For illiquid assets, independent third-party valuations should be obtained periodically.
##### 7.2. Investor Reporting
Investors must be kept informed of the fund’s performance, risks, and any material changes. Regular reports should include the Net Asset Value (NAV), portfolio composition, performance metrics, and relevant commentary on market conditions.
#### 8. Compliance and Regulatory Oversight
The fund must comply with all applicable laws and regulations, including those related to securities, anti-money laundering, tax, and investor protection. The Compliance Officer should regularly audit the fund’s activities to ensure adherence to all regulatory requirements.
#### 9. ESG Considerations
The fund recognizes the importance of Environmental, Social, and Governance (ESG) factors in long-term investment success. Where applicable, the fund manager should consider ESG factors in the investment decision-making process and report on these considerations to investors.
#### 10. Conclusion
This Fund Management Policy provides a robust framework for the effective management of the fund. It outlines the responsibilities of key stakeholders, defines the investment process, and establishes guidelines for risk management and compliance. By adhering to this policy, the fund manager aims to achieve the fund’s objectives, safeguard investor interests, and comply with applicable laws and regulations.
This policy will be reviewed annually to ensure that it remains aligned with the fund’s objectives, market conditions, and regulatory requirements.