aifmd risk management services for aifms (tradable)

RISK-BASED GOVERNANCE SOLUTIONS FOR AIFMS

Arkus, your Risk-based Governance Partner

Copyright © Arkus Financial Services - 2014 Arkus, your Risk-based Governance Partner

Who we are - Our values “Risk-based governance solutions: putting risk at the cornerstone of management efforts to drive value”

► At Arkus, we believe in the value of Risk-Based Governance as a key business driver and competitive advantage;

► Independence, innovation and transparency are our core values when servicing our clients with whom we thrive to establish real partnerships;

► At Arkus, risk management activities leverage on a strong understanding of portfolio management in order to create value;

► Being forward looking, dynamic and pro-active are the characteristics we value in our people. Today, we are proud to have a stable and committed team of 15 people with excellent academic and professional background among which 7 risk analysts, 3 IT developers and a compliance officer committed to serve you.

Excellent academic backgrounds

Most of our Risk Analysts are PhD candidates or

preparing for Risk Management professional

certifications (FRM, CFA,…)

Cambridge PhD thought leadership writers

Multicultural

One of our partners on the platform is one

of the first INSEAD certified directors


Who we are - The facts “Providers to the financial industry with cutting edge risk management solutions for more than 10 years”

Founded 10 years ago by asset management veterans;

Regulated as a Professional of the Financial Sector by the CSSF;

We are a European player present in Luxembourg, London, Dublin;

We monitor portfolios for more than 40 clients, for a volume of Assets under Monitoring of over €44 Bn as of September 2014, most of them on a daily basis;

Our clients include global and local asset managers. The portfolios monitored include segregated accounts, UCITS, and AIFs based in various European jurisdictions.


What we offer – An Overview “We have developed a suite of services along the risk based governance value chain”

RISK MONITORING & REPORTING SERVICES GOVERNANCE & SUBSTANCE SERVICES

Consultancy services

- Assistance in establishing AIF/AIFM risk profiles

- Review/draft of Risk Management Policies and procedures for UCITS and AIFs

Risk monitoring and reporting services (multiple risk engines feeding into our proprietary system RiskRadar™)

AIFMD Annex IV regulatory reporting services

Governance and compliance services

- Independent directors,

- Conducting Officers/Senior Managers

- Permanent risk management function (full delegation or support services to the in-house risk manager)

- Permanent compliance function (full outsourcing or support services to the compliance officer)

Substance services: office rental – secretarial services – support services

Consultancy services (Assistance to Management Companies - UCITS & AIFM- when establishing their manual of procedures and structuring their organizational structure)

Third party ManCo/AIFM services (with partners)

RISK-BASED GOVERNANCE

Copyright © Arkus Financial Services - 2014 Arkus, your Risk-based Governance Partner Page 4

How we can help in practice (1/3) 1. Risk monitoring and reporting services

“A comprehensive yet modular approach: we can support you along the entire risk management process”

AIF’S RISK PROFILING AIFM RMP REVIEW/ DRAFTING

RISK MONITORING RISK REPORTING

► Identification and formalization of all risks inherent to an AIF’s specific strategy by creating a risk hierarchy

► Provide guidance as to how to interpret proportionality

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► For operational risks, systematized scaling (probability and impact resulting in criticality score)

► Individual AIF risk profile summary

PERMANENT RISK MANAGEMENT FUNCTION

► Draft/ review of existing Risk Management Policy (RMP)

► This include s documenting governance, key risks and KRIs, limits , monitoring and reporting

► Core reports:

‒ Market risk report ‒ Leverage report ‒ Stress testing report ‒ Liquidity risk report

► Second layer reports:

‒ Concentration report ‒ Counterparty report

► AIFMD compliant RMP yet meaningful and tailored to specific investment strategy of the AIF based on a thorough understanding of the investment process

► Based on key risks identified , regular monitoring of KRIs and escalation in case of breach

► Provide you with tailored risk monitoring reports

► Individual risk management sheet

► Board packs risk report

► Regulatory risk reporting Annex 4

► Assist you pull together or prepare for you regular board reporting on risk; alert summaries etc.

► Prepare CSSF regulatory risk reporting compliant with AIFMD Annex 4 reporting template


“We have analysed the risk related building blocks of the Annex IV and created a tool that aggregates the relevant metrics in the respective format. The necessary calculations (VaR, Stress Tests, DV01, etc.) will be performed by our system and the output created will be compatible with all common interfaces.”

RELATED SECTION

BLOCK FIELD SPECTRUM DESCRIPTION

137 IRR

138 – 145 CS01/DV01/ Delta/Vega + repartition into buckets

146 – 147, 302 VaR

178 – 217 Liquidity (Asset and Liability side)

218 Total number of open positions

279 – 280 Stress Tests

294 – 295 Leverage

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2. REPORTS 1. ANALYSIS

TOTAL FIELDS COVERED:

20%

How we can help in practice (2/3) 2. AIFMD Annex IV regulatory reporting services

Copyright © Arkus Financial Services - 2014 Arkus, your Risk-based Governance Partner Page 1

“Arkus, your risk-based governance partner”

GOVERNANCE & COMPLIANCE SERVICES Access a diversified pool of high caliber and duly authorized professionals with operational mindset and established track records.

SUBSTANCE SERVICES Leverage on the technical and administrative support of a dynamic and multi-lingual team fully interacting with Arkus risk analysts and the risk monitoring services they provide.

► Set up a competent, diversified and complementary BoD;

► Strengthen your day-to-day managerial capabilities;

► Establish/enhance your permanent risk management function;

► Professionalize your compliance function, focus on critical risks and pragmatically address regulatory challenges.

► Rely on professional secretarial services;

► Support your conducting persons/permanent risk management function/compliance function operate efficiently and in a documented way;

► Locate your team in professional, secured and easily accessible settings.

YOU SEEK TO:

AND NEED TO:

We can help you substantiate your presence in Luxembourg

WE OFFER:

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AS WELL AS:

How we can help in practice (3/3) 3. Governance and substance services


How we add value “Adding-value through risk management activities requires a strong understanding of asset management”

ASSET MANAGEMENT EXPERIENCE

UNIQUE RISK PROFILING & MODELING CAPABILITIES

PRAGMATIC REGULATORY APPROACH

Leverages on their strong understanding and practical experience of asset management to partner with you;

Relies on unique risk profiling and risk modeling capabilities developed over the past 10 years across 3 crises to bring independent insights and meaningful reports;

Is nurtured by our involvement in professional associations, training institutions and close relationships with regulators which enable us to make the link between technical requirements of new regulations and their practical implementation in the real world.

Arkus’ multilingual team of professionals:

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Appendices


1. Risk monitoring & Reporting services AIFM-tailored Risk monitoring reports

In addition a second layer of control is also provided in the form of counterparty and concentration risk reports. Our clients told us that such documents have been valuable since complementary to reports produced by their Fund Admin or Depositary.

The following daily reports are typically made available to our clients:

o Market risk report (VaR, Equity delta, DV01, CS01, notional exposures)

o Leverage report

o Stress testing report

o Liquidity risk report


1. Risk monitoring & Reporting services Consultancy services: AIF risk profiling and AIFM RMP

Thanks to an established methodology developed over the past ten years, first for UCITS and then for AIFs, we support our clients:

o Establish and document the individual risk profiles of their AIFs

o Draft or enhance their AIFM Risk Management Process to turn it into a practical and operational AIFM-compliant toolbox


2. Governance & substance services Permanent Risk Management Function

The following reports are typically made available to our clients:

o Periodic Risk Review (quarterly)

o Monthly Report to Executive/Management Committee

o Regulatory Reporting: FDI reporting template


2. Governance & substance services Compliance Function

When hiring Arkus to outsource their AIFM permanent compliance function or in a capacity of support to their internal permanent compliance function, our clients would typically receive the following reports and dashboards:

o Compliance Report to CPs/Senior Management

o AIFMD-tailored compliance Plan, including a Compliance Calendar and a Compliance Dashboard


Should you have any questions…

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